Dragon Corporation acquired a 15% (15,000 shares) interest in the outstanding shares of Slayer Inc. on January 1, 2015 at a cost of $200,000. Dragon Corporation was a public company and comply with the Accounting Standards for public enterprises. Slayer reported net income and made dividend payments to its shareholders as noted below.

Year Income Dividends 2015 50,000 20,000

2016 (15,000) 20,000

2017 (40,000) 20,000

The market price of Slayers shares on December 31 are $16, $17 and $17 for 2015, 2016 and 2017 respectively. Required: (a) Prepare the journal entries that Dragon would make in each year using the appropriate accounting method.