Kent Company purchased 35 percent ownership of Lomm Company on January 1, 20X8, for $140,000. Lomm reported 20X8 net income of $80,000 and paid dividends of $20,000. At December 31, 20X8, Kent determined the fair value of its investment in Lomm to be $174,000.
Give all journal entries recorded by Kent with respect to its investment in Lomm in 20X8 assuming it uses
a. The equity method.
b. The fair value method.