Both Seco Inc. and Hillsborough Corp. have 100,000 shares of no-par common stock outstanding. World Inc. acquired 10,000 shares of Seco stock for $6 per share and 30,000 shares of Hillsborough stock for $12 per share in 2012. Both securities are being held as long-term investments. Changes in retained earnings for Seco and Hillsborough for 2012 and 2013 are as follows:

Instructions:
Give the entries required on the books of World Inc. for 2012 and 2013 to account for its investments?

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Hillsborough Corp. Seco Inc. Retained eaings (deficit), January 1, 2012 Net income, 2012 Cash dividends, 2012 Retained eamings, December 31, 2012 Net income, 2013 Cash dividends, 2013 Retained eanings, December 31, 2013 Fair value of stock: December 31, 2012 December 31, 2013 $175,000 40,000 (37,500) $177,500 70,000 (45,000) $202,500 $ 7.50 6.50 $ (45,000) 70,000 $ 25,000 40,000 (20,000) $ 45,000 $13.00 15.00