On January 1, 2015, Super Magic Inc. acquired 600,000 shares representing 40% of Pure Water Inc.'s shares

Question:

On January 1, 2015, Super Magic Inc. acquired 600,000 shares representing 40% of Pure Water Inc.'s shares at $10 per share. Pure Water Inc.'s net income at year-end is $600,000 and Super Magic Inc. received dividends on January 15, 2016, in the amount of $80,000.
Requirement
1. Prepare the necessary journal entries to record Super Magic Inc.'s investment.
2. Prepare the journal entry to record Super Magic Inc.'s adjustments to recognize Pure Water Inc.'s net income.
3. Prepare the journal entry when Super Magic received dividends.