Question 2 {20 marks} On January 1, 2016, Pendulum Inc. acquired 10,000 of the 100,000 outstanding shares of Swing Ijmited for a cash consideration of $100,000 plus brokerage charges of 2%. Pendulum elected to account for its investment at fair value through prot and loss. On that date, Swing Limited had common shares with a carrying value of $500,000 and retained earnings of $300,000. A year later, Pendulum Inc. acquired an additional 20,000 shares in Swing Limited for a consideration of $220,000 plus brokerage costs of 2%. This purchase gave Pendulum Inc. signicant inuence over the operating, nancing and investing activities of Swing Ijmited. On June 30, 2018, immediately after Swing paid its midyear dividend, Pendulum made a nal purchase of an additional 45,000 shares of Swing Limited at a cost of $585,000 plus brokerage costs of 2%. This purchase gave Pendulum Inc. control over Swing Limited. Any acquisition differential arising from these purchases was attributed to some capital assets which had an expected useful life of ten years on January 1, 201?. Pendulum Inc. has decided to account for its investment in its subsidiary using the cost method. Following are the income, dividends and market value for Swing Limited for 2016, 201? and 2018: Year Net income Dividends December 31 Dedared Market Value m 201? 100.000 805130 12.00 2018 140,000 100,111] 14.00 Income was earned evenly over each year and dividends were paid in equal instalments on June 30 and December 31 each year. Required: Prepare journal entries to record Pendulum's investment in Swing and the income from the investment for the period from January 1, 2016, to December 31, 2018