American Motor Inns (AMI) is engaged in the business of operating hotels and restaurants. A recent annual report of AMI included the following footnote to its financial statements:

\section*{(7) MINORITY INTEREST IN SUBSIDIARY}

In December, . . . the company's previously wholly owned subsidiary, Universal Communication Systems, Inc., sold 750,000 shares of its common stock to the public resulting in net proceeds of \(\$ 8,725,000\). This reduced the company's holding in that subsidiary to approximately \(84 \%\) of the outstanding common stock.

Given this information, would you expect the future consolidated financial statements of American Motor Inns to report its investment in Universal Communication Systems according to the equity method? Why or why not? Also, assume that American Motor Inns prepared a consolidated balance sheet immediately after the subsidiary's sale of stock to the public. Did the sale of stock have any effects on that balance sheet? If so, explain the effects.