Question

Use the following information for Questions 14-17 Gabby Greco Co. purchased a 40% interest in Kevin Hegarty Co. for $300,000, which enables Greco to exert a significant influence over Hegarty. 14) The journal entry to record the investment by Greco would be: A) debit Cash, credit Sales B) debit Equity Investments, credit Cash C) debit Equity Investments, credit Debt Investments D) debit Treasury Stock, credit Cash 15) The journal entry to record dividends received by Greco on the investment would be a debit to Cash and a credit to: A) Debt Investments B) Equity Investments C) Investment Income D) Unrealized Holding Gain 16) The journal entry Greco would make to record their share of the Net Income reported by Hegarty would be: A) debit Cash, credit Equity Investments B) debit Equity Investments, credit Cash C) debit Equity Investments, credit Investment Income D) debit Investment Income, credit Equity Investments 17) If Hegarty had reported a Net Loss, the journal entry made by Greco to record their share of the loss would be: A) debit Equity Investments, credit Investment Loss B) debit Investment Income, credit Equity Investments C) debit Investment Loss, credit Equity Investments D) debit Retained Earnings, credit Equity Investments

          Use the following information for Questions 14-17
Gabby Greco Co. purchased a 40% interest in Kevin Hegarty Co. for $300,000, which
enables Greco to exert a significant influence over Hegarty.
14) The journal entry to record the investment by Greco would be:
A) debit Cash, credit Sales
B) debit Equity Investments, credit Cash
C) debit Equity Investments, credit Debt Investments
D) debit Treasury Stock, credit Cash
15) The journal entry to record dividends received by Greco on the investment
would be a debit to Cash and a credit to:
A) Debt Investments
B) Equity Investments
C) Investment Income
D) Unrealized Holding Gain
16) The journal entry Greco would make to record their share of the Net Income
reported by Hegarty would be:
A) debit Cash, credit Equity Investments
B) debit Equity Investments, credit Cash
C) debit Equity Investments, credit Investment Income
D) debit Investment Income, credit Equity Investments
17) If Hegarty had reported a Net Loss, the journal entry made by Greco to
record their share of the loss would be:
A) debit Equity Investments, credit Investment Loss
B) debit Investment Income, credit Equity Investments
C) debit Investment Loss, credit Equity Investments
D) debit Retained Earnings, credit Equity Investments

Use the following information for Questions 14-17
Gabby Greco Co. purchased a 40% interest in Kevin Hegarty Co. for $300,000, which
enables Greco to exert a significant influence over Hegarty.
14) The journal entry to record the investment by Greco would be:
A) debit Cash, credit Sales
B) debit Equity Investments, credit Cash
C) debit Equity Investments, credit Debt Investments
D) debit Treasury Stock, credit Cash
15) The journal entry to record dividends received by Greco on the investment
would be a debit to Cash and a credit to:
A) Debt Investments
B) Equity Investments
C) Investment Income
D) Unrealized Holding Gain
16) The journal entry Greco would make to record their share of the Net Income
reported by Hegarty would be:
A) debit Cash, credit Equity Investments
B) debit Equity Investments, credit Cash
C) debit Equity Investments, credit Investment Income
D) debit Investment Income, credit Equity Investments
17) If Hegarty had reported a Net Loss, the journal entry made by Greco to
record their share of the loss would be:
A) debit Equity Investments, credit Investment Loss
B) debit Investment Income, credit Equity Investments
C) debit Investment Loss, credit Equity Investments
D) debit Retained Earnings, credit Equity Investments

Added by Thomas H.

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