On January 1, 2018. Sarah Inc. purchaed 25% of the outstanding common shares of Cole Co. for $1,620,000. At this time, the book value of Cole was $6,400,000. Any additional excess fair value over Cole's book value was attributed to a goodwill. All other assets and liabilities equal to their book values at the date of the acquisition. For 2022 Cole reported net income of $220,000 and paid $30,000 of dividends.

Instructions:

1) Provided Sarah's journal entry to recognize the 2018 Equity in Cole's Earnings.

2) Prepare Sarah;s journal entry to record receipt of the 2018 dividend from Cole.

3) Compute the balance in Sarah's Investment in Cole account at the end of 2018