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Cost Method Journal Entry: Date Account Head and Entry Debit $ Credit $ 2014 Jan 1
Investment in Investee Company 150,000 Cash 150000 May 31 Cash 12000 Dividend
Income 12000 Dec 31 No Entry 2015 Oct 1 Cash 8000 Dividend Income 8000
Dec 21 No Entry Dec 31 Cash 178000 Investment in Investee Company 150000
Income on sale of Investment 28000 EQUITY METHOD JOURNAL ENTRY: 2016
Jan 1 Investment in Investee company (20% stake) 150000 Cash 150000 May 31 Cash
12000 Investment account 12000 Dec 31 Investment Account 20000 Income Account
"equity in Investee Company" 20000 2017 Oct 1 Cash 8000 Investment account
8000 Dec 21 Investment account 16000 Income Account "equity in Investee Company"
16000 Dec 31 Cash 178000 Investment in Investee company (20% stake) 150000
Income account "gain on sales of investment in Investee Company" 28000
Solution
Cost Method Journal Entry: Date Account Head and Entry Debit $ Credit $ 2014 Jan 1
Investment in Investee Company 150,000 Cash 150000 May 31 Cash 12000 Dividend
Income 12000 Dec 31 No Entry 2015 Oct 1 Cash 8000 Dividend Income 8000
Dec 21 No Entry Dec 31 Cash 178000 Investment in Investee Company 150000
Income on sale of Investment 28000 EQUITY METHOD JOURNAL ENTRY: 2016
Jan 1 Investment in Investee company (20% stake) 150000 Cash 150000 May 31 Cash
12000 Investment account 12000 Dec 31 Investment Account 20000 Income Account
"equity in Investee Company" 20000 2017 Oct 1 Cash 8000 Investment account
8000 Dec 21 Investment account 16000 Income Account "equity in Investee Company"
16000 Dec 31 Cash 178000 Investment in Investee company (20% stake) 150000
Income account "gain on sales of investment in Investee Company" 28000

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Cost Method Journal Entry Date Account Head and Entry Debit .pdf

  • 1. Cost Method Journal Entry: Date Account Head and Entry Debit $ Credit $ 2014 Jan 1 Investment in Investee Company 150,000 Cash 150000 May 31 Cash 12000 Dividend Income 12000 Dec 31 No Entry 2015 Oct 1 Cash 8000 Dividend Income 8000 Dec 21 No Entry Dec 31 Cash 178000 Investment in Investee Company 150000 Income on sale of Investment 28000 EQUITY METHOD JOURNAL ENTRY: 2016 Jan 1 Investment in Investee company (20% stake) 150000 Cash 150000 May 31 Cash 12000 Investment account 12000 Dec 31 Investment Account 20000 Income Account "equity in Investee Company" 20000 2017 Oct 1 Cash 8000 Investment account 8000 Dec 21 Investment account 16000 Income Account "equity in Investee Company" 16000 Dec 31 Cash 178000 Investment in Investee company (20% stake) 150000 Income account "gain on sales of investment in Investee Company" 28000 Solution Cost Method Journal Entry: Date Account Head and Entry Debit $ Credit $ 2014 Jan 1 Investment in Investee Company 150,000 Cash 150000 May 31 Cash 12000 Dividend Income 12000 Dec 31 No Entry 2015 Oct 1 Cash 8000 Dividend Income 8000 Dec 21 No Entry Dec 31 Cash 178000 Investment in Investee Company 150000 Income on sale of Investment 28000 EQUITY METHOD JOURNAL ENTRY: 2016 Jan 1 Investment in Investee company (20% stake) 150000 Cash 150000 May 31 Cash 12000 Investment account 12000 Dec 31 Investment Account 20000 Income Account "equity in Investee Company" 20000 2017 Oct 1 Cash 8000 Investment account 8000 Dec 21 Investment account 16000 Income Account "equity in Investee Company" 16000 Dec 31 Cash 178000 Investment in Investee company (20% stake) 150000 Income account "gain on sales of investment in Investee Company" 28000