Assume that YC makes an investment in Sustain Inc., a sustainability consulting firm. YC purchases 200 shares of Sustain stock for $15,500 cash. Sustain has 500 shares of common stock outstanding, and YC will be able to significantly influence its policies.

Required

1. Prepare the journal entry to record the investment in Sustain on January 1. 

2. Sustain declares and pays a total cash dividend of $1,000. Prepare the journal entry to record YC’s receipt of its share of the dividend on July 1. 

3. Sustain reports net income of $5,000. Prepare the journal entry to record YC’s share of those earnings on December 31.