E18-5 Basic accounting for stock investment (L.O. 2) On January 1 of the current year, Hagan Company acquired 10,000 shares of Atlantic Corporation's common stock at $10 per share. The following information has come to your attention: 1 During the current year, Atlantic generated net income of $240,000 and paid dividends totaling $72,000. 2 The year-end market price of Atlantic's common stock was $9.25 per share. 3 Hagan has no other long-term investments. Assume that Atlantic has 100,000 shares of common stock outstanding. a Determine which method (lower-of-cost-or-market or equity) should be used to account for Hagan's investment. of cost b Present all appropriate journal entries for Hagan Company. Compute the year-end carrying value of Hagan's investment. 92,500