Presented below are two independent situations.

Situation 1: Hatcher Cosmetics acquired 10% of the 200,000 ordinary shares of Ramirez Fashion at a total cost of \($14\) per share on March 18, 2015. On June 30, Ramirez declared and paid a \($75\),000 cash dividend.

On December 31, Ramirez reported net income of \($122\),000 for the year. At December 31, the market price of Ramirez Fashion was \($15\) per share. The investment is classified as trading.

Situation 2: Holmes, Inc. obtained significant influence over Nadal Corporation by buying 25% of Nadal’s 30,000 outstanding ordinary shares at a total cost of \($9\) per share on January 1, 2015. On June 15, Nadal declared and paid a cash dividend of \($36\),000. On December 31, Nadal reported a net income of \($85\),000 for the year.

Instructions Prepare all necessary journal entries in 2015 for both situations.