On January 1, 2021, Green Apple, Inc., purchased 10% of Red Pen Enterprises for $1,000,000. Red Pen recognized a total of $370,000 net income during 2021, paid $27,000 of dividends to Green Apple during 2021, and at December 31, 2021, the market value of the Red Pen investment increased to $1,037,000.

Required: Prepare the journal entries necessary to account for the Red Pen investment, assuming that Green Apple

(1) does not have significant influence or

(2) does have significant influence over the operating and financial policies of the investee.