Disney Inc. purchased 27 percent of Pixar's voting stock on January 1, 2014, for £3.8 million in cash. At the date of acquisition, Pixar reported its total assets at £70 million and its total liabilities at £64 million. Investigation revealed that Pixar's film library (15-year life) was overvalued by £2.1 million and it had an unreported software (4-year life) valued at £800,000. Pixar declares and pays £140,000 in dividends and reports net income of £300,000 in 2022.

Required: Prepare the necessary journal entries on Disney's books to report the above information for 2022 assuming Disney uses the equity method to report its investment.