Adobe Inc. purchased 34 percent of Corel Corporation's voting stock on January 1, 2013, for £5 million in cash. At the date of acquisition, Corel reported its total assets at £80 million and its total liabilities at £72 million. Investigation revealed that Corel's equipment (8-year life) was overvalued by £2.5 million and it had an unreported trademark (10-year life) valued at £900,000. Corel declares and pays £180,000 in dividends and reports net income of £350,000 in 2020.

Required: Prepare the necessary journal entries on Adobe's books to report the above information for 2020 assuming Adobe uses the equity method to report its investment.