Wirt Corporation owns 25 percent of the voting stock of Wood Corporation and accounts for the investment using the equity method.Wood reports a net loss of $20,000.Wirt Corporation's entry to record its share of loss is:

Question

Quizplus · Accepted Answer

Under the equity method, Wirt Corporation would record its share of Wood Corporation's net loss by debiting a loss account and crediting the investment account for its share of the loss, which is 25% of $20,000, or $5,000.

Wirt Corporation Owns 25 Percent of the Voting Stock of Wood