Journal Entries for Fair Value and Equity Methods Presentedbelow are two indepen

Journal Entries for Fair Value and Equity Methods Presentedbelow are two independent situations.Situation 1Hatcher Cosmetics acquired 10% of the 200000 shares ofcommon stock of Ramirez Fashion at a total cost of $14 per share onMarch 18 2010. On June 30 Ramirez declared and paid a $75000cash dividend. On December 31 Ramirez reported net income of$122000 for the year. At December 31 the market price of RamirezFashion was $15 per share. The securities are classified asavailable-for-sale.Situation 2Holmes Inc. obtained significant influence over NadalCorporation by buying 25% of Nadals 30000 outstanding shares ofcommon stock at a total cost of $9 per share on January 1 2010. OnJune 15 Nadal declared and paid a cash dividend of $36000. OnDecember 31 Nadal reported a net income of $85000 for theyear.Question:Prepare all necessary journal entries in 2010 for bothsituations.