Dragon Corporation acquired a 7% interest in the outstanding shares of Slayer Inc. on January 1, 2010 at a cost of $200,000. Dragon Corporation was a private company and reported in compliance with the Accounting Standards for Private Enterprises and accounted for Slayer Inc., whose shares were not publicly traded, using the cost method. Slayer reported net income and made dividend payments to its shareholders at noted below. On December 31, 2012 Slayer declared bankruptcy as a result of a series of losses as noted. a) Prepare the journal entries that Dragon would make in each year. b) Prepare the general ledger account for Dragon's investment in Slayer.

Question

Dragon Corporation acquired a 7% interest in the outstanding shares of Slayer Inc. on January 1, 2010 at a cost of $200,000. Dragon Corporation was a private company and reported in compliance with the Accounting Standards for Private Enterprises and accounted for Slayer Inc., whose shares were not publicly traded, using the cost method. Slayer reported net income and made dividend payments to its shareholders at noted below. On December 31, 2012 Slayer declared bankruptcy as a result of a series of losses as noted.  a) Prepare the journal entries that Dragon would make in each year. b) Prepare the general ledger account for Dragon's investment in Slayer.

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The Answer of Dragon Corporation acquired a 7% interest in the outstanding shares of Slayer Inc. on January 1, 2010 at a cost of $200,000. Dragon Corporation was a private company and reported in compliance with the Accounting Standards for Private Enterprises and accounted for Slayer Inc., whose shares were not publicly traded, using the cost method. Slayer reported net income and made dividend payments to its shareholders at noted below. On December 31, 2012 Slayer declared bankruptcy as a result of a series of losses as noted.  a) Prepare the journal entries that Dragon would make in each year. b) Prepare the general ledger account for Dragon's investment in Slayer.

Dragon Corporation Acquired a 7% Interest in the Outstanding Shares