Selk Steel Co., which began operations in Year 1, had the following transactions and events in its long-term investments. Year 1

Jan.		5		Selk purchased 60,000 shares (20% of total) of Kildaire's common stock for $1,320,000.
Oct.		23		Kildaire declared and paid a cash dividend of $2.20 per share.
Dec.		31		Kildaires net income for the year is $1,164,000 and the fair value of its stock at December 31 is $30 per share.

Year 2

Oct.		15		Kildaire declared and paid a cash dividend of $3.10 per share.
Dec.		31		Kildaires net income for the year is $1,195,000 and the fair value of its stock at December 31 is $32 per share.

Year 3

Jan.

2

Selk sold 2% (equal to 1,200 shares) of its investment in Kildaire for $66,500 cash.

Required: 1. Assume that Selk has a significant influence over Kildaire with its 20% share of stock. Prepare the following journal entries to record these transactions and events for Selk:

Oct 15: Kildaire declared and paid a cash dividend of $3.10 per share.

Jan 02: Selk sold 2% (equal to 1,200 shares) of its investment in Kildaire for $66,500 cash.

2. Prepare the following journal entries for these transactions:

Dec 31: Kildaire's net income for the year is $1,164,000, and the fair value of its stock at December 31 is $30 per share. Dec 31: Kildaire's net income for the year is $1,195,000, and the fair value of its stock at December 31 is $32 per share.

Jan 02: Selk sold 2%(equal to 1,200 shares) of its investment in Kildaire for $66,500 cash.