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Harmon Company owns 25% of the stock of Jackson Corp. which is 12,000 outstanding shares. The...

Harmon Company owns 25% of the stock of Jackson Corp. which is 12,000 outstanding shares. The Shares were purchased for $120,000 at the beginning of the year in 2018. During 2018, Harmon earns $1,400,000 in net income and pays dividends of $4 per share. (A) record the investment, (B) record the receipt of dividends, and (c) record the net income.

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Answer #1
S.no Particulars Debit   Credit  
a Investment - Shares in Jackson Corp $    120,000.00
Cash $    120,000.00
(being investment made in Jackson Corp recorded)
b Dividends $ 400,000.00
Cash $ 400,000.00
(being dividends @ $4/share paid on 100,000 shares of Harmon Company)
c Net Income $    1,400,000.00
Retained earnings $    1,400,000.00
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