On 1 July 2015, Investor Ltd acquired 25% of the shares of Investee Ltd for $42,500. At this date, all the identifiable assets and liabilities of Investee Ltd were recorded at amounts equal to fair value, and the equity of Investee Ltd consisted of:
|Asset revaluation surplus||20,000|
During The 2015–16 year, Investee Ltd reported a profit of $25,000. As reported in other comprehensive income, the asset revaluation surplus increased by $5,000. Investee Ltd paid a $4,000 dividend and transferred $3,000 to general reserve.
Prepare the equity accounting journal entries at 1 July 2016 assuming that Investor does not prepare consolidated financial statements.
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