Appleson Corporation purchased 20% of Thompson Corporation for $600,000 on January 1, 2011. Assume Appleson has significant influence. At the time of purchase, the fair value of Thompson's net assets was the same as the book value of net assets except for a building owned by Thompson. The building had a 20-year remaining life, and the fair value was $800,000 greater than its book value. Thompson uses the straight line depreciation method. For 2011, Thompson declared a net income of $180,000 and paid dividends of $80,000. Ignore income taxes. Appleson Corp. uses IFRS.
Required:
(a) Prepare the four journal entries for Appleson Corp. for 2014 related to the Thompson investment.
(b) What is the balance of the investment account on December 31, 2011?