January 1, 2026, Bailey Inc. (Bailey) purchased 1,500 common…

Jаnuаry 1, 2026, Bаiley Inc. (Bailey) purchased 1,500 cоmmоn shares (5% оf the outstanding common shares) of Tom Inc. (Tom) for $100 per share.  November 30, 2026, Tom paid a cash dividend of $1.25 per share.  At year end, December 31, 2026, Tom's shares had a fair value of $90.50 per share and Tom reported a $125,000 net loss for the year. Required: Prepare all the journal entries for 2026 in Bailey's books related to the above transaction assuming that Bailey Inc. can exercise significant influence over Tom Ltd., using the equity method in the template below.  Note: extra rows have been provided to allow for spacing.