Question - On January 15, 2010, National Star, Inc. purchased 55,000 shares of Krypton Labs, Inc. directly from one of the founders for a price of $65 per share. Krypton has 200,000 outstanding, including the National Star shares. On July 2, 2010, Krypton paid $175,000 in total dividends to its shareholders. On December 31, 2010, Krypton reported a net income of $625,000 for the year. National Star uses the equity method in accounting for its investment in Krypton Labs.
a. Provide the National Star, Inc. journal entries for the transactions involving its investment in Krypton Labs, Inc. during 2010.
b. Determine the December 31, 2010, balance of Investment in Krypton Labs, Inc. Stock.
Can someone help with providing step by step instructions on how to arrive at the answer? I like to know how to do this myself but can't figure out the answer. Thank You!