Selk Steel Co., which began operations in Year 1, had the following

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 $1,560,000.

Oct. 23 Kildaire declared and paid a cash dividend of $3.20 per share.

Dec. 31 Kildaire’s net income for the year is $1,164,000, and the fair value of its stock at December 31is $30.00 per share.

Year 2

Oct. 15 Kildaire declared and paid a cash dividend of $2.60 per share.

Dec. 31 Kildaire’s net income for the year is $1,476,000, and the fair value of its stock at December 31 is $32.00 per share.

Year 3

Jan. 2 Selk sold 3% (equal to 1,800 shares) of its investment in Kildaire for $54,200 cash.

Required

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

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