Potterton Company acquired most of the stock of Sanzibar Corporation on January 1st. Detailed below are the purchase details as well as Sanzibar's total Net Income and total Dividend payments for the first two years after Potterton acquired them. Year 1 and Year 2 are consecutive years (e.g. 2017 and 2018)

REQUIREMENT:

Account for the investment by preparing all journal entries (including initial investment) for Potterton Company for both Year 1 AND Year 2. Potterton uses the COST method to account for investments. Note!! These are NOT elimination entries! This is accounting for the investment account. Space your debits and credits well! Use the table function if necessary.

DETAILS:

Purchase Price	$425,000
Percentage Purchased	90%
Net Income - Year 1	$40,000
Dividends - Year 1	$25,000
Net Income - Year 2	$60,000
Dividends - Year 2	$85,000