Equity method transactions Rowan Co. purchases 600 common shares (40%) of JBI Corp. as a long-term investment for $550,000 cash on July 1. JBI Corp. paid $8,750 in total cash dividends on November 1 and reported net income of $175,000 for the year.
1) Prepare Rowan's entries to record the purchase of JBI shares, the receipt of its share of JBI dividends and the December 31 year-end adjustment for its share of JBI net income.
2) Record the receipt of the dividend Nov 1
3) Record the Adjustment required for the investment account Dec 31