On May 1, 2020, Cheng Company, a public company, acquired 214,800 of the 716,000 outstanding common shares from Preston Company for a total of $1,643,000. This investment is part of Cheng Companys long-term business diversification plan. Cheng Companys year-end is December 31, and it chooses to use the equity method of accounting for its strategic investments. During 2020, the following investment activities occurred.

1) Preston Company recorded an annual net income of $1,098,000 for its 20192020 fiscal year-end of June 30, 2020. 2) Preston Company paid a cash dividend of $248,000 on July 30, 2020. Required Prepare journal entries to record the acquisition of shares by Cheng Company, the revenue of investment from Preston Company on June 30, 2020 and the receipt of cash dividends on July 30, 2020. For simplicity, calculate any share of profit strictly as a percentage of the current holdings, although those shares have not been held for a full year.

Date	Account Title and Explanation	Debit	Credit
May 1
	To record acquisition of common shares
Jun 30
	To record profit on equity investment
Jun 30
	To record dividends received on equity investment