How will the Equity method be recorded in both ABC & XYZ company?

Elaborate with Step by Step!!!!

Example: The Equity Method ABC C ompany acquires significant influence over XYZ ompany by purchasing 20 percent of the common stock of the XYZ Company for $100,000, XYZ earns income of $60,000 and pays dividends of $20,000. * Recognition of income . This entry (equity accrual) is normally made as an adjusting entry at the end of the period Ifthe investee reports aloss, the investorrecognizes its share of the loss and reduces the carrying amount of the investment by that amount Example: The Equity Method * Recognition of dividends Carrying amount of the investment