Monty Ltd

Accounting Nov 13, 2020

Monty Ltd. is a Canadian publicly-traded business with a December 31 fiscal year end. In order to get a better return on some of its excess cash, Monty purchased 200 common shares of AFS Corporation on July 1, 2020 at a price of $5 per share. On the day of acquisition, Monty elected to account for the investment using the fair-value through other comprehensive income (FV-OCI) without recycling. On August 1, 2020, AFS declared dividends of $1/share, and paid those dividends on August 20, 2020. On December 31, 2020, shares in AFS were trading at $7 per share. On September 15, 2021, Monty sold the shares in AFS for $8 per share.

Prepare the journal entries required to record the above transactions on the books of Monty Ltd.

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