On January 1, O'Byrne Corporation purchased, as long-term investments, 8 percent of the voting stock of Magda Corporation for $500,000 and 45 percent of the voting stock of Sumari Corporation for $2 million. During the year, Magda Corporation had earnings of $200,000 and paid dividends of $80,000. Sumari Corporation had earnings of

$600,000 and paid dividends of $400,000. The market value of neither investment changed during the year. Which of these investments shduld be accounted for using the cost-adjusted-to-market method? Which should be accounted for using the equity method? At what amount should each investment be carried on the balance sheet at year end? Give a reason for each choice. LO1