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Prepare journal entries for Sky Corporation transactions

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Question - Sky Corporation engaged in several transactions involving a long-term investment. The equity method is used to account for this investment because Sky has significant influence over Lift.

a) On Jan 1, 2018, Sky Corporation purchased 2,000 common shares of Lift Corporation for $12 per share. This represents 20% ownership of Lift Corporation.

b) On March 31, 2018, Lift Corporation pays a $0.75 per share dividend to all common shareholders.

c) On December 31, 2018, the market price of Lift Corporation shares is $12.50 per share.

d) On December 31, 2018 Lift Corporation reported net income of $70,000.

Prepare journal entries for the above transactions.

Reference no: EM132229591

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