Equity Method Investment with Basis Differences Several Years Later Saxton Corporation purchased 25 percent of Taylor Company's voting stock on January 1, 2013, for $18 million in cash. At the date of acquisition, Taylor reported its total assets at $360 million and its total liabilities at $336 million. Investigation revealed that Taylor's plant and equipment (15-year life) was overvalued by $10.8 million and it had an unreported customer database (2-year life) valued at $3 million. Taylor declares and pays $600,000 in dividends and reports net income of $1,500,000 in 2016. Required Prepare the necessary journal entries on Saxton's books to report the above information for 2016 assuming Saxton uses the equity method to report its investment. General Journal Description Debit Credit Cash 150,000 Investment in Taylor 0 150,000 Investment in Taylor 720,000 x Equity in net income of Taylor 720,000 x