Education Corporation purchased all of Agency Co.'s common stock on January 1, 2XX2, for $4,000,000 cash. Agency's stockholders' equity amounted to $2,800,000. The excess of $1,200,000 was due to an unrecorded patent with a 15-year life. In 2XX2, Agency reported net income of $1,000,000 and paid dividends of $100,000.

What is the Equity Investment balance at December 31, 2XX2?

(Answer is not 4,000,000 or 5,408,600)