QUESTION 1 (22 Marks) On January 1, Year 1, Play acquired 1,000,000 common shares of Station for $3 each. At the time, the Station had 10,000,000 common shares outstanding. The investment was classified as FV-NI. In Year 1, Station reported net income of $165,000 and did not declare or pay dividends. At December 31, Year 1 the fair value of Station's shares was $3.20 per share. On January 1, Year 2, Play acquired another 1,500,000 common shares of Station for $3.20 each. The book values of Station's net assets were equal to fair values except for specialized equipment, which was understated by $48,000. The equipment had an estimated remaining life of 5 years. In Year 2, Station reported net income of $180,000 and paid dividends of $18,000. At December 31, Year 2 the fair value of Station's shares was $3.50 per share. On January 1, Year 3, Play acquired another 2,000,000 common shares of Station for $3.50 per share. The book values of Station's net assets were equal to fair values except for specialized equipment, which was now understated by $42,000 and had an estimated remaining useful life of 4 years. In Year 3, Station reported net income of $210,000 and paid dividends of $16,000. At December 31, Year 3, the fair value of Station's shares was $3.80 per share. On January 1, Year 4, Play acquired another 2,500,000 common shares of Station for $3.80 each. The book values of Station's net assets were equal to fair values except for specialized equipment, which was now understated by $36,000 and had an estimated remaining useful life of 3 years. Station reported net income of $190,000 and paid dividends of $14,000. At December 31, Year 4, the fair value of Station's shares was $3.60 per share. On January 1, Year 5, Play sold 700,000 shares of Station for $3.60 per share. On the date of the sale, Play showed a balance of $1,500,000 in its contributed surplus account. REQUIRED: Prepare the yearly journal entries on the books of Play to record the investment in Station for Years 1-4 and the Year 5 sale of the shares in Station.