On January 1, 2021, Montgomery Engine Corporation paid $ 410,000 to purchase 25% of the outstanding voting shares of Joyce Global Corporation. Montgomery Engine applies IFRS and therefore the equity method is used to account for the investment. The following data relate to this investment.
2021
- Dividends received from Joyce Global amounted to $ 25,000.
- Net income reported by Joyce Global was $ 250,000.
- Current market value of Joyce Global investment on December 31, 2021, was $ 365,000.
2022
- Dividends received from Joyce Global amounted to $ 25,000.
- Net income reported by Joyce Global was $ 295,000.
- Current market value of Joyce Global investment on December 31, 2022, was $ 430,000.
Instructions
Prepare all journal entries for 2021 and 2022 relating to Montgomery Engine Corporation's investment in Joyce Global Corporation.
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