Milner Corporation owns 25 percent of the voting stock of Vaglia Corporation and accounts for the investment using the equity method.Vaglia reports a net loss of $10,000.Milner Corporation's entry to record its share of loss is:

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Milner Corporation uses the equity method to account for its investment in Vaglia Corporation. Under the equity method, Milner Corporation records its share of Vaglia Corporation's net income or loss as an adjustment to its investment account. In this case, Vaglia Corporation reported a net loss of $10,000, so Milner Corporation's share of the loss is $2,500 (25% x $10,000). The entry to record Milner Corporation's share of the loss is:Loss on Investments 2,500Investment in Vaglia Corporation 2,500

Milner Corporation Owns 25 Percent of the Voting Stock of Vaglia