On January 1, 2017, Harper Corporation acquired 30% of the outstanding common shares of Feeley Corporation for $300,000, purchased 25% of the outstanding common shares of Holmes for $82,500, and obtained significant influence in both situations. The following information concerning Feeley and Holmes is available on the aquisition date:

	Feeley	Feeley	Holmes
	Book value	Fair Value	Book Value
Depreciable assets (remaining life, 15 years)	$600,000	$700,000	$170,000
Other Assets	500,000	450,000	160,000
Total	$1,100,000	$1,150,000	$330,000
Liabilities	$300,000	$320,000	$90,000
Common Stock	250,000		160,000
Retained Earnings	550,000		80,000
Total	$1,100,000		$330,000

*IN U.S. DOLLARS

During 2017, Feeley reported a loss of $70,000 and paid dividends of $40,000; Holmes reported income of $45,000 and paid dividents of $28,000. On January 2, 2018, Harper sold all the Holmes shares for $90,000. Assume Harper records both investments under the equity method and consider the difference between the purchase price and the book value of the net asset acquired for Holmes as goodwill.

Instructions:

1. Prepare the journal entries to record the events above for 2017 and record the sale of the Holmes shares on January 2, 2018.

2. Determine the balance for Harpers investment in Feeley and Investment in Holmes at the December 31,2017. You MUST show a schedule or basis for these amounts.

Please provide answers in US dollars.

Please provide calculations, or show how you got the numbers, as footnotes under journal entries.