An investor owns 25% of an investee, and accounts for its investment using the equity method. At the beginning of the year, the Equity Investment was reported on the investor's balance sheet at $2,500,000. During the year, the investee reported net income of $1,000,000 and paid dividends of $250,000. In addition, the investor sold inventory to the investee, realizing a gross profit of $300,000 on the sale. At the end of the year, 30% of the inventory remained unsold by the investee. a. Provide the equity method journal entries required for the year Description Debit Credit 0 0 0 0 To record the recognition of equity income. 0 0 0 0 To record deferred profits in ending inventory. 0 0 0 0 To record receipt of dividends. b. What is the balance of the Equity Investment at the end of the year? $ 0 c. Assume that the inventories are all sold in the following year, that the investee reports $1,125,000 of net income. How much equity income will the investor report for the following year? $ 0