On January 1, 20X7, Mica Company purchased 40% of Santos Corporation 500,000 outstanding shares of common stock at a total cost of $13 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, 20X7 Santos reported a net income of $860,000 for the year, and the market price of its common stock was $14 per share. Prepare all necessary journal entries for Mica company for 20X7.