On Jan. 1, Brock Co. purchases 40% of the outstanding voting stock of New Co. for $400,000, equal to the market and book values News individual assets and liabilities. This stock ownership gives Brock the ability to significantly influence the operating and financing policies of New. On Dec. 31, New reports earnings of $100,000 and pays dividends of $20,000.

Prepare Brocks journal entries to record its investment activity in New.

Note: No goodwill (market=book value).

Purchase:?

Earned income:?

Dividend paid:?