On March 1, 2018, as a Trading Investment, Mahdi Acquired

question 100

Essay

On March 1, 2018, as a trading investment, Mahdi acquired 12% of the 250,000 issued common shares of Noah Limited at $8 per share. On July 1, 2018, Noah declared and paid a cash dividend of $2 per share. On December 31, 2018, Noah's reported net income was $654,000 for the year and its shares were trading at $7.50.InstructionsPrepare all necessary journal entries relating to these two investments for 2018 for Mahdi Corporation.

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Definitions:

Open Door Policy

A policy in which a company or nation maintains openness to trade with all countries or offers unhindered access to its services or office to its personnel.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, typically identified by a fall in GDP in two successive quarters.

Deregulation

The process of reducing or eliminating government rules controlling how businesses can operate, often to increase market competition.

Subsidization

The act of providing financial aid or support by a government or organization to lower the cost of producing goods or services.