Exercise 4-1 Percy Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $406,000. At the time of purchase, Song Company's total stockholders' equity amounted to $496,800. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: Net Income (loss) Dividend distribution 2014 2015 2016 $60,600 $53,900 ($57,200 ) 23,800 50,600 36,300 Prepare journal entries on the books of Percy Company from the date of purchase through 2016 to account for its investment in Song Company under each of the following assumptions: Your answer is partially correct. Try again. Percy Company uses the complete equity method to record its investment. The difference between book value of equity acquired and the value im depreciable assets, with a remaining life of 10 years. (Credit account titles are automatically indented when amount is entered. Do not in enter o for the amounts.) Debit Credit Date Account Titles and Explanation 20141 Investment in Subsidiary IL 406000 406000 1 cash (To record the investment in Song Company) Investment in Subsidiary 48480 48480 I Equity Income (To record equity income (loss)) cash 19040 Investment in Subsidiai 19040 (To record amortization) Equity Income 856 856 Investment in Subsidiai (To record dividend income) Investment in Subsidiary 45760 45760 I Equity Income (To record equity income (loss)) cash 40480 | Investment in Subsidiai 40480 (To record amortization) Tcash Investment in Subsidiary (To record dividend income) 015 Investment in Subsidiary 45760 Equity Income 45760 (To record equity income (loss)) k II cash 40480 Investment in Subsidiai 40480 (To record amortization) Tcash Investment in Subsidiary (To record dividend income) Equity Income 45670 - G Investment in Subsidiai 45670 (To record equity income (loss)) 856 Investment in Subsidiai (To record amortization) . cash 29040 29040| T Investment in Subsidian (To record dividend income) SHOW LIST OF ACCOUNTS