Equity Method for Stock Investment At a total cost of $1,170,000, Herrera Corporation acquired 100,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 400,000 shares of common stock outstanding, induding the shares acquired by Herrera a. Journalize the entries by Herrera Corporation to record the following information: 1. Tran Corp. reports net income of $2,110,000 for the current period. Investment in Tran Corp. Stock Income of Tran Corp. 2. A cash dividend of $1.80 per common share is paid by Tran Corp. during the current period Cash Check My Work a. 2. Reduce the investment and increase cash by the number of shares acquired times dividends paid per share. b. Why is the equity method appropriate for the Tran Corp. investment? Next 3:21 PM 3/3/2019