Capital Investments Inc. purchased 40% of the outstanding shares of Deep Value Inc. on January 1, 20X3, for $10,000. Capital Investments has chosen to record its investment in Deep Value under the cost method. Deep Value earned $8,000 and $10,000 in 20X3 and 20X4, respectively. Further, Deep Value declared and paid dividends of $4,000 and $5,000 in 20X3 and 20X4, respectively.

Required
Prepare the necessary adjusting entries required of Capital Investment in 20X3 and 20X4, respectively, if it wants to report its investment in Deep Value under the equity method.