On January 1, 2020, Twitter Company acquired 20 percent of the voting shares of Musk, Inc., for $3,300,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Twitter made the investment to gain access to Musks board of directors and thus facilitate future cooperative agreements between the two firms. Twitter quickly obtained several seats on Musks board, which gave it the ability to significantly influence Musks operating and investing activities.

The January 1, 2020, carrying amounts and corresponding fair values for Musks assets and liabilities follow:

	Carrying Amount			Fair Value
Cash and receivables	$	140,000		$	140,000
Computing equipment		5,270,000			6,180,000
Patented technology		130,000			4,060,000
Trademark		180,000			2,060,000
Liabilities		(215,000	)		(215,000	)

Also, as of January 1, 2020, Musks computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a three-year remaining useful life. The trademark's useful life was considered indefinite. Twitter attributed to goodwill any unidentified excess cost.

During the next two years, Musk reported the following net income and dividends:

	Net Income		Dividends Declared
2020	$	1,860,000	$	180,000
2021		2,045,000		190,000

Instructions:

Prepare an acquisition date fair value analysis and compute the annual amortization

Prepare Twitters equity method journal entries for 2020 and 2021

Calculate the investment account balance and equity in investees earnings for 2020 and 2021