Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2020, for $251,800 in cash. The book value of Kinman's net assets on that date was $450,000, although one of the company's buildings, with a $62,400 carrying amount, was actually worth $108,900. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $133,000.

Kinman sold inventory with an original cost of $58,800 to Harper during 2020 at a price of $84,000. Harper still held $24,300 (transfer price) of this amount in inventory as of December 31, 2020. These goods are to be sold to outside parties during 2021.

Kinman reported a $55,400 net loss and a $29,800 other comprehensive loss for 2020. The company still manages to declare and pay a $5,000 cash dividend during the year.

During 2021, Kinman reported a $51,000 net income and declared and paid a cash dividend of $7,000. It made additional inventory sales of $70,000 to Harper during the period. The original cost of the merchandise was $43,750. All but 30 percent of this inventory had been resold to outside parties by the end of the 2021 fiscal year.

Prepare all journal entries for Harper for 2020 and 2021 in connection with this investment. Assume that the equity method is applied. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

1. Record the initial investment.

2. Record the divided declaration.

3. Record the receipt of dividend.

4. Record the accrual income and OCI rom equity investee.

5.Record the amortization relating to acquisition of Kinman.

6. Record the deferred unrealized gross profit of intra-entity sale.

7. Record the divided declaration.

8. Record the receipt of dividend.

9. Record the 40% accrual of income as earned by equity investee.

10. Record the amortization relating to acquisition of Kinman.

11. Record the recognized income deferred from 2020.

12. Record the deferred unrealized gross profit on intra-equity sale.