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PROBLEMI The following transactions appear on the Investment in Paniqui account of Tarlac Corporation: Date Particulars Debit Credit 01/02/20 Purchased 10,000 shares 2,000,000 12/31/20 Purchased 15,000 shares 3,180,000 04/30/22 Sold 12,500 shares @231 2,887,500 Your audit revealed the following additional information: > On January 2, 2020, Tarlac, Inc. acquired a 10% interest in Paniqui Corp. by paying P2,000,000 for 10,000 ordinary shares. > On December 31, 2020, Tarlac paid P3,180,000 for 15,000 additional ordinary shares of Paniqui, which represents a 15% interest in Paniqui. Tarlac Corp.'s accounting manual requires the use of fair value as deemed cost approach' to account for step acquisitions. The acquisitions on January 2 and December 31 were made at prices proportionate to the value assigned to Paniqui's net assets, which equaled their carrying amounts. Tarlac uses the average method in recording disposals of its investments. From Paniqui's financial statements, you were able to obt following information: 2020 2021 2022 Profits 2,000,000 3,000,000 1,500,000 Dividends paid on July 1 1,000,000 1,500,000 600,000 Closing market quotation for the shares of Paniqui: December 31, 2020 212 December 31, 2021 216 December 31, 2022 220 Required: Prepare the necessary adjusting journal entries as of December 31, 2022

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