I was going through the entries and wanted to know if I would have to include the amorization expense or not in my journal entries? As well as the second journal entry for the 5k increase.

Or is the question just containing a lot more fluff then I'm lead to believe. :( I appreciate any help/corrections I can get on this!

Change from Fair Value to Equity Method: On January 1, 2017, Alpha Company exchanges $95,000 for a 10 percent ownership in Bailey Company. At the end of 2017, Bailey company fair value was $1,000,000; Alpha recognizes the increase in its 10 percent share to $100,000. On January 1, 2018, Alpha purchases an additional 30 percent of Bailey's outstanding voting stock for $325,000 when Bailey book value is $937,500. On January 1, 2018, Bailey carrying amounts for its assets and liabilities equaled their fair value except for equipment, which wa:s undervalued by $125,000 and had a 10 year remaining useful life. Additionally, Bailey reports net income of $235,000 and declares and pays a $75,000 dividend at the end of 2018. Prepare the necessary journal entries: 2017 (Acquiring the Asset under Fair Value): Investment in Bailey Co 95000 Cash 95000 To record initial investment Investment in Baily Co 5000 Investment Income 5000 To record investment income increase