0 Recording Entries for Equity Investment: Equity Method, Partial Year On July 1, 2020, Allen Corporation purchased 30% of the 12,000 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 $3,200 on December 30, 2020, to shareholders on record. During the year, Towne Corporation reported net income of $9,600. 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 To record investment purchase Dec. 30, 2020 0 0 0 0 To recard receior of dividends. Dec 31, 2020 0 0 To record proportionate share of investee's net income Dec. 31, 2020 0 0 To adjust investment to fair value 0 0 0 0 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 Balance Sheet, December 31 2020 Assets