Situation 1 Novak Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $68,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share. Situation 2 Splish, Inc. obtained significant influence over Seles Corporation by buying 40% of Seless 27,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders. On December 31, Seles reported a net income of $84,700 for the year.

Prepare all necessary journal entries in 2020 for both situations.

Date Debit Credit Account Titles and Explanation Situation 1: Novak Cosmetics Situation 2: Splish, Inc