EFG Corp. purchased 35 percent of HIJ Company's voting stock on January 1, 2012, for £5 million in cash. At the date of acquisition, HIJ reported its total assets at £70 million and its total liabilities at £64 million. Investigation revealed that HIJ's machinery (8-year life) was overvalued by £2 million and it had an unreported customer list (4-year life) valued at £800,000. HIJ declares and pays £150,000 in dividends and reports net income of £280,000 in 2020.

Required: Prepare the necessary journal entries on EFG's books to report the above information for 2020 assuming EFG uses the equity method to report its investment.