Exercise 12-25 (Algorithmic) Fair value and Equity Methods Nadal Corporation purchased 16,300 common shares of Beck Inc., on January 1, 2018, for $83,000. During 2018, Beck declared and paid cash dividends to Nadal in the amount of $7,000. Nadal's share of Beck's net income for 2018 was $6,300. At December 31, 2018, the fair value of the 10,000 shares was $116,000. This is Nadal's only investment Required: 1. Assume that Beck has 122,250 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment? 2018. jan. 1 Investments-Beck Inc. 83.000 Cash 83,000 (Record purchase of Beck shares) 2018. jan. 1 7,000 Cash Dividend Income 7.000 (Record receipt of dividend) 2018. Dec. 31 Investments-Beck Inc. 33,000 33.000 Unrealized Gain (Loss) on fair value (Record adjustment to fair value) 2. Assume that Beck has 65,200 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment? 2018, Jan. 1 Investments-Equity Method 83,000 Cash 83,000 (Record purchase of Beck shares) 2018, Jan. 1 Cash 7,000 Investments-Equity Method 7,000 (Record receipt of dividend) 2018, Dec. 31 Investments-Equity Method 11,800 Investment Income-Equity Method 11,800 x (Record Nadal's share of Beck's net income)