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On January 1, 2020, Fisher Corporation purchased 40 percent (90,000 shares) of the common
stock of Bowden, Inc., for $974 , 000 in cash and began to use the equity method for the
investment. The price paid represented a $60 , 000 payment in excess of the book value of
Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment
because of a recently developed potent held by Bowden with a 15-year remaining life. All other
assets were considered appropriately valued on Bowden's books. Bowden deciares and pays a
$92.000 cash dividend to its stockholders each year on September 15 . Bowden reported net
income of $386 , 000 in 2020 and $344 , 000 in 2021 . Each income figure was earned evenly
throughout its respective years. On July 1, 2021, Fisher soid 10 percent (22,500 shares) of
Bowden's outstanding shares for $326 , 000 in cash. Although it sold this interest, Fisher
maintained the ability to significantly influence Bowden's decision-making process. Prepare the
journal entries for Fisher for the years of 2020 and 2021. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Round your final answers to the nearest whole dollar.)

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On January 1- 2020- Fisher Corporation purchased 40 percent (90-000 sh.pdf

  • 1. On January 1, 2020, Fisher Corporation purchased 40 percent (90,000 shares) of the common stock of Bowden, Inc., for $974 , 000 in cash and began to use the equity method for the investment. The price paid represented a $60 , 000 payment in excess of the book value of Fisher's share of Bowden's underlying net assets. Fisher was willing to make this extra payment because of a recently developed potent held by Bowden with a 15-year remaining life. All other assets were considered appropriately valued on Bowden's books. Bowden deciares and pays a $92.000 cash dividend to its stockholders each year on September 15 . Bowden reported net income of $386 , 000 in 2020 and $344 , 000 in 2021 . Each income figure was earned evenly throughout its respective years. On July 1, 2021, Fisher soid 10 percent (22,500 shares) of Bowden's outstanding shares for $326 , 000 in cash. Although it sold this interest, Fisher maintained the ability to significantly influence Bowden's decision-making process. Prepare the journal entries for Fisher for the years of 2020 and 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)