Equity method vs Fair Value Method $($MC $15$ & $16)$

On January $1,2022,$ an investor purchases $26,000$ common shares of an investee at $$12$ per share. The shares represent $20\%$ ownership in the investee. The investee's common stock has a readily determinable fair value. On Jan. $1,2022,$ the book value of the investee's assets and liabilities equals $$1,235,000$ and $$195,000,$ respectively. On that date, the appraised fair values of the investee's identifiable net assets approximated the recorded book values.

During the year ended Dec. $31,2022,$ the investee company reported net income equal to $$65,000$ and dividends equal to $$19,500.$ On Dec. $31,2022,$ the fair value of the investee's stock is $$16$ per share.

A$.1.$ If the investor CANNOT exert significant influence over the investee, what method must the investor use to record the investment? Fair value

$2.$ Make the journal entries for the $2022$ year.

$3.$ What is the balance in the investment account.

B$.1.$ If the investor CAN exert significant influence over the investee, what method must the investor use to record the investment?

$2.$ Make the journal entries for the $2022$ year.

$3.$ What is the balance in the investment account.

Investment