Equity Method Investment with Basis Differences Several Years Later

STU Corporation purchased 28 percent of VWX Company's voting stock on January 1, 2014, for £4.2 million in cash. At the date of acquisition, VWX reported its total assets at £75 million and its total liabilities at £68 million. Investigation revealed that VWX's land (indefinite life) was overvalued by £2.5 million and it had an unreported technology (3-year life) valued at £800,000. VWX declares and pays £130,000 in dividends and reports net income of £290,000 in 2022.

Required: Prepare the necessary journal entries on STU's books to report the above information for 2022 assuming STU uses the equity method to report its investment.