Jaycie Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2013. The purchase price was $1,531,600 for 54,700 shares. Kulikowski Inc. declared and paid an $0.79 per share cash dividend on June 30 and on December 31, 2014. Kulikowski reported net income of $781,700 for 2014. The fair value of Kulikowskis stock was $31 per share at December 31, 2014.

(a) Prepare the journal entries for Jaycie Phelps Inc. for 2013 and 2014, assuming that Phelps cannot exercise significant influence over Kulikowski. The securities should be classified as available-for-sale