X purchased 40% of Y on January 1, 2019, for $400,000. Y paid dividends of $50,000 in
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Question:
X purchased 40% of Y on January 1, 2019, for $400,000. Y paid dividends of $50,000 in each year. Y's income statements for 2019 and 2020 showed the following.
| 2019 | 2020 | |
| Income (loss) before income taxes | $100,000 | ($60,000) |
| Income tax expense (recovery) | 40,000 | (15,000) |
| Net income (loss) | $60,000 | ($45,000) |
| Other comprehensive income (net of tax) | 20,000 | 25,000 |
| Comprehensive income (loss) | $80,000 | ($20,000) |
At December 31, 2019, the fair value of the investment was $440,000 and on December 31, 2020, the fair value of the investment was $420,000.
Required:
Prepare X's journal entries for 2019 and 2020, assuming that this is a non-strategic investment and is accounted for at fair value through profit and loss (FVTPL).
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