E16-5 Suppose Dillard's, Inc., owns equity-method investments in several other depart- ment-store companies. Suppose Dillard's paid $2 million to acquire a 25% investment in Italian Imports Company. Assume that Italian Imports Company reported net income of $780.000 for the first year and declared and paid cash dividends of $500,000. Record the fol- lowing in Dillard's journal:

(a) purchase of the investment,

(b) its proportion of Italian Imports' net income, and

(c) receipt of the cash dividends.