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Pursley, Inc. acquires 10% of Ritz Corporation on January 3, 2017, for $80,000 when the book value of Ritz was $800,000. Pursley adjusted the investment

Pursley, Inc. acquires 10% of Ritz Corporation on January 3, 2017, for $80,000 when the book value of Ritz was $800,000. Pursley adjusted the investment to its fair value of $162,500 at December 31, 2017. During 2017 Ritz reported net income of $125,000 and paid dividends of $30,000. On January 1, 2018, Pursley purchased an additional 20% of Ritz for $325,000, giving Pursley the ability to significantly influence the operating policies of Ritz. There was no excess cost over book value. During 2018 Ritz report net income of $150,000 and paid dividends of $60,000. What journal entries by Pursley are required for 2017 and 2018?

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