On January $1,2024,$ Champion Company acquired $80,000$ of the outstanding shares of Durham

Company for $$15$ per share. This acquisition gave Champion a $30\%$ ownership of Durham and

allowed Champion to significantly influence the investee$$s decisions.

As of January $1,2024,$ Durham had assets with a book value of $$3$ million and liabilities of

$$75,000.$ At that time, Durham held equipment with an eight$-$year remaining life and no salvage

value, appraised at $$360,000$ more than book value. Durham also held a patent with a four$-$year

remaining life on its books that was undervalued by $$980,000.$ Any remaining excess cost was

attributable to goodwill. Depreciation and amortization are computed using the straight$-$line

method.

Champion applies the equity method for its investment in Durham.

Durham$$s policy is to declare and pay a $$1$ per share cash dividend every April $1$ and October $1.$

Durham$$s income, earned evenly throughout each year was $$640,000$ in $2024,$ and $$680,000$ in

$2025.$

I need help in figuring out:

$1.$ What would be the entry for Champion$$s investment in Durham on January $1,2024.$

$2.$ How would I calculate the equity income to be recognized by Champion during $2024$ and $2025.$

$3.$ What would be Champion$$s Investment in Durham Company$$s balance as of December $31,$

$2024$ and December $31,2025.$