Honest Company owns a 20 percent interest in Right Company purchased on January 1, 2019, for $300,000. Right reports net income of $150,000, $200,000, and $240,000, respectively, in the next three years while declaring dividends of $50,000, $60,000, and $80,000.

The fair values of Honest investment in Right, as determined by market prices, were $345,000, $382,000, and $410,000 at the end of 2019, 2020, and 2021, respectively.

Required:

1. Prepare all of the required journal entries to record the above transaction using the fair value method.

2. Prepare all of the required journal entries to record the above transaction using the equity method.