Answer:
Perfection records in it's books an Investment in Associate of $486,000
Step-by-step explanation:
Hi, your question has missing information, i tried to look for the full question online but I could not find it.
However, I have prepared below explanation to the problem.
When a firm has investments into another firm of less than 50% voting rights in stake but greater than 20% we say that firm has significant influent in the investee. The firm is said to have an Investment in an Associate.
Investments in Associates are always recorded using the Equity Method of Accounting.
Entries for Investment in Associate are :
Debit :Investment in Associate ($1,944,000 × 25%) $486,000
Credit : Share of profits of associate $486,000
Conclusion :
Perfection records in it's books an Investment in Associate of $486,000