During review of the adjusting entries to be recorded on December 31, 20X8. Grand Corporation discovered that it had inappropriately been using the cost method in accounting for its investment in Case Products Corporation. Grand Corporation purchased 40 percent ownership of Case Products on January 1, 20X6, for \(\$ 56.000\), at which time Case Products reported retained earnings of \(\$ 60,000\) and capital stock outstanding of \(\$ 40,000\). The purchase differential was attributable to patents with a life of eight years. Income and dividends of Case Products were

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Give the correcting entry required on December \(31,20 \times 8\), to properly report the investment under the equity method assuming the books have not been closed. Case Products dividends were declared in early November and paid in early December each year.

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Year Net Income Dividends 20X6 $40.000 $15,000 20X7 60.000 20,000 20X8 80.000 20,000