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Company JJ acquired 2,000 shares of common stock in Company KK for $50 per share, representing a 40% ownership stake. Calculate the equity method investment

Company JJ acquired 2,000 shares of common stock in Company KK for $50 per share, representing a 40% ownership stake. Calculate the equity method investment value and the share of Company KK's net income to be recorded by Company JJ if Company KK reports net income of $80,000. Provide the journal entry for recording the equity method investment. Discuss the equity method of accounting for investments and its implications for financial reporting.

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