3. Georgia, Inc. bought 30% of Carolina Company on January 1, 2016 for $225,000.The equity method was used.No amortization was required.In 2016, Carolina shipped to Georgia merchandise with a cost of $12,000 and a selling price of $15,600.One-third of the merchandise remained in Georgia's inventory at year-end and was sold in 2017.In 2017, Carolina received merchandise from Georgia, who recorded a gross profit of $18,000 on the sale.One-fourth of the merchandise remained in ending inventory.Carolina reported net income of $50,000 in 2016 and $62,000 in 2017.Dividends of $8,000 were paid to Georgia each year.

Required:Prepare all equity method entries for 2016 and 2017