Question: On January 1, 2020, XXX Company acquired 500,000 shares at $ 50 per share of ZZZ Inc. which represent 20% ownership.

Required

Record the following transactions in the books of XXX Company (assuming there is significant influence and insignificant influence)

1. The acquisition of shares done by XXX firm on January 1, 2020
2. The ZZZ Inc had reported net income of $ 2,000,000
3. XXX Inc. had announced and paid cash dividends of $ 400,000
4. On December 31, 2020, ZZZ Inc. shares been valued at $ 40 per share, and XXX Company still owns 500,000 shares
5. On December 31, 2021, ZZZ Inc. shares would be valued at $ 44 per share, and XXX Flowers Company will still own 500,000 shares