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Point 1: Ayayai Corporation purchased a 20% interest in Moss Inc. for $300. This investment gave Ayayai significant influence over Moss. During the year, Moss earned net income of $15 and paid dividends of $5. Assuming the purchase price was equal to 20% of Moss's net carrying amount when it was acquired.
Question 1: Prepare Ayayai's journal entries related to this investment using the equity method. Ayayai applies IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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