On January 1, 2021, Alamar Corporation acquired a 38 percent interest in Burks, Inc., for $199,000. On that date, Burkss balance sheet disclosed net assets with both a fair and book value of $325,000. During 2021, Burks reported net income of $75,000 and declared and paid cash dividends of $22,000. Alamar sold inventory costing $25,000 to Burks during 2021 for $38,000. Burks used all of this merchandise in its operations during 2021.

Prepare all of Alamars 2021 journal entries to apply the equity method to this investment.