Accounting for stock investments

The beginning balance sheet of Book Source Co. included a $500,000 investment in Larsen stock (30% ownership). During the year, Book Source completed the following investment transactions:

May 3	Purchased 8,000 shares at $6 per share of Jack Software common stock as a long-term, available-for-sale investment, representing 8% ownership
May 15	Received cash dividend of $0.50 per share on the Jack investment
Dec 15	Received cash dividend of $60,000 from Larsen investment
Dec 31	Received Larsens annual report showing $400,000 of net income
Dec 31	Received Jacks annual report showing $120,000 of net income for the year
Dec 31	Larsens stock fair value at year-end was $620,000
Dec 31	Jacks common stock fair value at year-end was $5 per share

Requirements

Journalize the transaction for the year of Book Source

Post transactions to T-accounts to determine the December 31 balances related to the investment and investment income accounts

Prepare Book Sources partial balance sheet at December 31 from your answer in requirement 2