Prepare dated journal entries for Ocean Enterprises for 2017 to account for its investment in Zebrafish and any related income therefrom.
Ocean Enterprises Inc. acquired 15% of the 100,000 outstanding common shares
of Zebrafish Ltd. on January 1, 2017 for a cash consideration of $150,000 and a
further 10% of the company's common shares a year later for $110,000. On July
1, 2018, Ocean Enterprises sold half their holding in Zebrafish for proceeds of
$150,000.
Zebrafish earned income of $150,000 in 2017 and $180,000 in 2018 (evenly over
both years) and paid a regular semi-annual dividend of $60,000 in June and
December each year.
Ocean Enterprises does not have significant influence over Zebrafish and elected
when it first acquired its initial investment in Zebrafish to account for this
investment through other comprehensive income. The company's shares were
trading for $11 at the end of 2017 and $12.50 at the end of 2018.
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