If Nolte Company acquired a 20% interest in Boswell Company on December 31, 2011 for $65,000 and the equity method of accounting for the investment was used, the amount of the debit to Investment in Boswell Company would have been

Question

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The equity method requires the investment to be recorded at cost, which is the amount paid for the investment. Therefore, the debit to Investment in Boswell Company would be $65,000, the purchase price.

If Nolte Company Acquired a 20% Interest in Boswell Company