Answer:
Investment Made,
Investment in Bowden (Dr.) $986000
Cash (Cr.) $986000
Dividend Received,
Cash (Dr.) $41600
Investment (Cr.) $41600
Net Income
2017
Investment in Bowden (Dr.) $158400
Retained Earnings (Cr.) $158400
2018 January-June
Investment in Bowden (Dr.) $70800
Retained Earnings (Cr.) $70800
2018 July-December
Investment in Bowden (Dr.) $53100
Retained Earnings (Cr.) $53100
Selling 10% Stock
Cash (Dr.) $328000
Investment in Bowden (Cr.) $328000
Explanation:
Fisher Corporation purchased 40% of Bowden using Equity method. Investment in Bowden is debited with the amount of $986000 and Cash is credited with the amount of $986000.
For Dividend received the journal entry will be cash debited by $41600 ($104000 * 40%) and the credit effect is on the Investment.
Net Income of Bowden is debited by 40% of Net Income in the accounts of Fisher Corporation. And is proportionate in 2018 where 10% shares are sold out. In first 6 months of 2018 the Net Income is multiplied by 40% and in the last 6 months of 2018 the Net Income is multiplied by 30%.
10% Holding is sold out for $328000. Cash is debited and Investment in Bowden is credited.