On January $1,2023,$ Mojito Corporation purchased $20\%(20,000$ shares$)$ of the

outstanding stock of Dulcinea Corporation for $$170,000.$ During $2023,$ Dulcinea

Corporation paid total dividends of $$35,000$ and earned $$70,000$ in net income. At the

end of $2023,$ Dulcinea Corporation$$s stock had a fair market value of $$165,000.$

Required:

a$.$ Prepare the journal entries that Mojito would make during $2023$ assuming that they

do NOT have significant influence over Dulcinea as a result of their stock ownership

$($i$.$e$.$ fair value method$).$

b$.$ Prepare the journal entries that Mojito would make during $2023$ assuming that they

do have significant influence over Dulcinea as a result of their stock ownership $($i$.$e$.$

equity method$).$

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