On January 15, 2015, National Star Ltd. purchased 80,000 shares of Krypton Labs Ltd. directly from one of the founders for $55 per share. Krypton has 250,000 shares outstanding, including the National Star shares. On July 2, 2015, Krypton paid $217,000 in total dividends to its shareholders. On December 31, 2015, Krypton reported a net income of $735,000 for the year. National Star uses the equity method in accounting for its investment in Krypton Labs.
a. Provide the National Star Ltd. journal entries for the transactions involving its investment in Krypton Labs Ltd. during 2015.
b. Determine the December 31, 2015, balance of Investment in Krypton Labs Ltd. Shares.