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On January 1, 2019, Mojito Corporation purchased 26% (30,000 shares) of the outstanding stock of...

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Accounting

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On January 1, 2019, Mojito Corporation purchased 26% (30,000 shares) of the outstanding stock of Dulcinea Corporation for $175,000. During 2019, Dulcinea Corporation paid total dividends of $85,000 and earned $135,000 in net income. At the end of 2019, Dulcinea Corporation's stock had a fair market value of $6 per share. Required: a. Prepare the journal entries that Mojito would make during 2019 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). They are using the fair value method. b. Prepare the journal entries that Mojito would make during 2019 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method)

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