BioPharma Corp. is preparing its financial statements for the year ending December 31, 20X1. The company had the following investments and related transactions:

• January 1: Purchased 5,000 shares of common stock in another company for $200,000 as a long-term investment.
• July 1: Received a cash dividend of $2 per share from the investee company.
• December 31: The fair value of the investment increased to $220,000.

Required:

1. Prepare the journal entries for the investment and related transactions during the year.
2. Calculate the unrealized gain or loss on the investment as of December 31, 20X1.
3. Prepare the balance sheet extract showing the investment at fair value.
4. Discuss the impact of the investment’s fair value changes on the company’s financial performance and position.