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Prepare journal entries to record purchase of investment

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Reference no: EM131702519

Question - Monty Corporation purchased 380 shares of Sherman Inc. common stock for $12,900 (Monty does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.50 per share.

Prepare Monty' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)

Reference no: EM131702519

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