Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $281,000....

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Accounting

Pirate Corporation purchased 100 percent ownership of Ship Company on January 1, 20X5, for $281,000. On that date, the book value of Ships reported net assets was $216,000. The excess over book value paid is attributable to depreciable assets with a remaining useful life of 5 years. Net income and dividend payments of Ship in the following periods were as shown below:

Year Net Income Dividends

20X5 $ 22,000 $ 19,000

20X6 42,000 29,000

20X7 22,000 41,000

Year	Net Income	Dividends
20X5	$ 22,000	$ 19,000
20X6	42,000	29,000
20X7	22,000	41,000

Required:

Prepare journal entries on Pirate Corporations books relating to its investment in Ship Company for each of the three years, assuming it accounts for the investment using the equity method.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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