Pender Corp. paid $245,000 for a 30% interest in Saltspring Limited on January 1, Year 6. During Year 6, Saltspring paid dividends of $102,000 and reported profit as follows:

Profit before discontinued operations			$299,000
Discontinued operations loss (net of tax)			(30,600)
Profit			$268,400

Penders profit for Year 6 is calculated on $918,000 in sales, expenses of $102,000, income tax expense of $326,400, and its investment income from Saltspring. Both companies have an income tax rate of 40%.

Required:

Assume that Pender uses the cost method.

(i) Prepare all journal entries necessary to account for Penders investment for Year 6.

• Record 30% investment in Saltspring.
• Record dividends received.
• Record 30% of Saltspring's profit and discontinued operations.