On 17 March 20X6, Thanushan Company makes an investment of $815,000 to purchase 40% of the shares of Sheth Ltd. The purchase results in significant influence over Sheth Ltd. Sheth declared paid dividends totalling $12,000 on 30 June 20X6. Sheth Ltd had earnings of $68,000 for the year. Required: Prepare the journal entries required for 20X6 using the equity method.

Prepare the journal entry required on 17 March 20X6 by Thanushan:

Prepare the journal entry required to record the receipt of dividends from Sheth:

Prepare the journal entry required to record Thanushans share of Sheths earnings: