Zeus Ltd acquired a 30% interest in Medusa Ltd for $100,000 on 1 July 2017.At that date, shareholders' equity of Medusa Ltd consisted of:

$

Share Capital

200,000

Retained Earnings

100,000

At 1 July 2017, the identifiable net assets of Medusa Ltd were recorded at fair value.

Information about income and changes in equity for Medusa Ltd for the year ended 30 June 2020 is as follows:

Medusa Ltd

$

Revenue

500,000

Expenses

(320,000)

Profit before income tax

180,000

Income tax expense

(40,000)

Profit for the period

140,000

Retained earnings (1/7/19)

280,000

420,000

Dividend paid

(30,000)

Dividend declared

(40,000)

(70,000)

Retained earnings (30/6/20)

350,000

Additional information:

(i)On 1 January 2019, Medusa Ltd sold Zeus Ltd an item of plant for $60,000.The plant had originally cost Medusa Ltd $80,000 and had a carrying amount of $50,000 at the time of sale to Zeus Ltd.Both companies depreciate plant at the rate of 20% per annum on cost.

(ii)Medusa Ltd sells goods to Zeus Ltd at a profit.The inventory of Zeus Ltd at 1 July 2019 included $4,000 unrealised profit as result of purchases from Medusa Ltd.

(iii)Zeus Ltd regards Medusa Ltd as an 'associate' company.

(iv)Zeus Ltd accrues their entitlement to any final dividends declared by Medusa Ltd.

(v)The income tax rate is 30%.

Required:

In accordance with AASB 128Investments in Associates and Joint Ventures:

(a)Prepare thejournal entry(s) in the records of Zeus Ltdin relation to the investment in Medusa Ltd for the year ended 30 June 2020 assuming Zeus Ltd doesnotprepare consolidated financial statements. Show ALL workings.(Note: narrations areNOTrequired.)