Netflix Inc. purchased 31 percent of Hulu LLC's voting stock on January 1, 2016, for £4.5 million in cash. At the date of acquisition, Hulu reported its total assets at £75 million and its total liabilities at £69 million. Investigation revealed that Hulu's software (5-year life) was overvalued by £2.3 million and it had an unreported customer base (3-year life) valued at £700,000. Hulu declares and pays £150,000 in dividends and reports net income of £320,000 in 2021.

Required: Prepare the necessary journal entries on Netflix's books to report the above information for 2021 assuming Netflix uses the equity method to report its investment.