XYZ Company had the following transactions related to ABC Company over a two-year period:
Year 1
1. On January 1, XYZ purchased 35 percent ownership of ABC Company for $700,000 cash.
2. ABC Company had net income of $70,000 for the year.
3. At year-end, ABC Company paid its shareholders dividends of $60,000.
Year 2
1. XYZ Company purchased on January 1 an additional 5 percent of ABC Company's stock for $75,000 cash.
2. ABC Company declared a 10 percent stock dividend.
3. ABC Company had net income of $150,000 for the year.
4. At year-end, ABC Company paid its shareholders dividends of $100,000.
Required:
Prepare the journal entries for XYZ Company's books for the above transactions.