As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 460,000 shares for $540,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMCs net assets were equal. During the year, AMC earned net income of $310,000 and distributed cash dividends of 20 cents per share. At year-end, the fair value of the shares is $571,000.

Record the purchase of AMC Supplies shares for $540,000 as a long-term investment. Record Painters' Equipment's share of AMC Supplies' $310,000 net income. Record the cash dividend of 20 cents per share. 4 Record any necessary year-end adjusting journal entry when the fair value of the shares held are $571,000. 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) X Answer is complete but not entirely correct. No Transactions General Journal Debit Credit 1 1 Gain on investments (NI) x 540,000 Cash 540,000 2 2 No journal entry required 3 3 92,000 Cash Dividend revenue 92,000 X 4 4. 31,000 Fair value adjustment Gain on investments (unrealized, NI) 31,000