Question

Marley investment, inc purchased 45% of the common stock of Beige corpaoration on 1 january 2019.

Answer 1

Answer: Debit Equity Investments-Beige Corporation 315,000 Credit Revenue from Investments 315,000

Explanation: the given scenario Marley Investment is purchasing 45% of common stock of Beige Corporation Revenue for the year is $700,000 So the cost of purchase will be 0.45 * 700,000 = $315,000 Since Marley Investment is making an investment in Beige shares, it will debit it's Equity Investment for this amount ($315,000) Equity investment are costs incurred when a business purchases securities. After purchase of the shares the revenue can now be recognised by crediting the Revenue from Investment account. Marley Investment is now a stakeholder in Beige Corporation