Pam Corporation purchased a 40 percent interest in Sun Corporation for $2,000,000 on January 1, at book value, when Sun's assets and liabilities were recorded at fair values. During the year, Sun reported net income of $1,200,000 as follows (in thousands):
Income from continuing operations .............................. $1,400
Less: Loss from discontinued operations ........................ (200)
Net income ..........................................................$1,200
Required:
Prepare the journal entry on Pam's books to recognize income from the investment in Sun for the year?