Recording Entries for Equity Investment: Equity Method, Partial Year On July 1, 2020, Allen Corporation purchased 30% of the 84,000 outstanding common shares of Towne Corporation at $17 per share as a long- term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. Towne Corporation paid cash dividends of $22,400 on December 30, 2020, to shareholders on record. During the year, Towne Corporation reported net income of $67,200. As of December 31, 2020, common shares of Towne Corporation were trading at $20 per share. a. Record Allen's entries in 2020 assuming that Allen Corporation had significant influence over Towne Corporation Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero) Date Account Name Dr. Cr. Jul 1, 2020 0 0 0 To record investment purchase. Dec, 30, 2020 0 0 0 0 0 To record receipt of dividends. Dec 31, 2020 0 0 0 0 To record proportionate share of investee's net income. Dec 31, 2020 0 0 0 0 To adjust investment to fair value. b. Indicate the effects of this investment on the 2020 income statement of Allen Corporation and its year-end balance sheet. Note: Use a negative sign to indicate a loss. Income Statement 2020 Other Revenues and Gains $ 0 Balance Sheet, December 31 2020 Assets 1 * $ 0