Gomez, Inc., purchased 9% of Lakeside Company for $2,000,000 on January 1, 2021. Lakeside recognized a total of $350,000 net income during 2021, paid $45,000 of dividends to Gomez during 2021, and at December 31, 2021, the market value of the Lakeside investment increased to $2,300,000. Required: Prepare the journal entries necessary to account for the Lakeside investment, under the following assumptions:

a. Assume Gomez does not have significant influence over the operating and financial policies of the investee.

b. Assume Gomez does have significant influence over the operating and financial policies of the investee.