On January 2, 2018, the Frankel Corporation purchased 60% of the 200,000 outstanding shares of Jennifer Morea Educational Services at a price of $2 per share. The following additional data were available for Jennifer Morea Educational Services at January 2, 2018:

Description Book Values Appraised Fair Values

Depreciable Assets (10 year life/straight-line depre) $120,000 $144,000

Cash and all other assets 160,000 160,000

Total Assets $280,000

Liabilities $20,000 $20,000

Contributed Capt (Common Stock& Addi Paid in Capt) 200,000

Retained earnings 80,000

Total Liabilities and Stockholders' Equity $280,000

In 2018, Jennifer Morea Educational Services reported net income of $40,000 and declared and paid cash dividends of $16,000 on December 31, 2018.

Assuming that Frankel issues separate company financial statements and uses the equity method for this purpose.

Prepare all journal entries necessary to account for this investment under the Equity Method during 2018 (i.e., at the date of acquisition and at year end). Any goodwill indicated by the transaction must be computed.