ON JANUARY 2, 2020, RAMS CORP. ACQUIRED 30% OF THE OUTSTANDING COMMON STOCK OF COLTS CO. FOR $2,000,000. THIS ACQUISITION GAVE THE RAMS THE ABILITY TO EXERCISE SIGNIFICANT INFLUENCE OVER THE INVESTEE. THE 100% BOOK VALUE OF THE ACQUIRED SHARES WAS $4,500,000.

ANY EXCESS COST OVER THE UNDERLYING BOOK VALUE WAS ASSIGNED TO A PATENT THAT WAS UNDERVALUED ON THE COLT'S BALANCE SHEET. THIS PATENT HAS A REMAINING USEFUL LIFE OF TEN YEARS.

FOR THE YEAR ENDED DECEMBER 31, 2020, COLTS REPORTED NET INCOME OF $650,000 AND PAID CASH DIVIDENDS OF $190,000.

REQUIRED:

CALCULATE THE BALANCE IN THE INVESTMENT ACCOUNT - HINT

BEGINNING + ADDITIONS - SUBTRACTIONS = ENDING

THEN

RECORD ALL JOURNAL ENTRIES FOR THE ABOVE INVESTMENT.