Complete the journal entries as necessary for both Part 1 and Part 2.

Part 1.

Transaction

1. On January 1st of 2020, Casey bought 10% of Tower Companys 100,000 shares of outstanding common stock at $20 a share.

2. On December 31, 2020 Tower reported $40,000 of net income and paid $20,000 of dividends.

3. On December 31, 2020, the market price of stock was $ 25 a share. Assume there was a zero balance in the fair value adjustment account.

Part 2.

Complete the journal entries as required:

Transaction

4. On January 1st of 2020, Casey bought 30% of Tower Companys 100,000 shares of outstanding common stock at $20 a share and has significant influence.

5. On December 31, 2020 Tower reported $40,000 of net income and paid $20,000 of dividends.

6. On December 31, 2020, the market price of stock was $ 25 a share. Assume there was a zero balance in the fair value adjustment account before this transaction.