On January 1,20X2,Soho Co.purchased 4,000 shares,representing 12%,of Rico Inc.for $78,000.Soho is a publicly traded company.During the next two years,the following information was available for Rico.
Required:
a.Assuming Soho classifies this investment as FVTPL,prepare the journal entries for the next two years related to this investment,and the carrying value of the investment at the end of 20X2 and 20X3.
b.Assuming Soho classifies this investment as FVTOCI,prepare the journal entries for the next two years related to this investment,and the carrying value of the investment at the end of 20X2 and 20X3.
Definitions:
Church and State
The concept or legal principle concerning the separation of religious institutions and government entities, aiming to prevent any single religion from dominating public policy or government functions.
Indian Lands
Areas of land within the United States that are reserved for Native American tribes and are recognized as such by the federal government.
Massachusetts Bay Colonists
The settlers of the Massachusetts Bay Colony, an English settlement on the east coast of North America in the 17th century.
New England Indians
Indigenous peoples living in the region known as New England, in the northeastern United States, prior to and during European colonization.
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