Peone, Inc. purchased 15% of Rhodo Corporation's 100,000 outstanding common shares at a cost of $30 per share on January 3, 2020. The purchase price of $30 per share was based solely on the book value of Rhodo's net assets. On September 21, Rhodo declared and paid a total cash dividend of $120,000. On December 31, Peone's year end, Rhodo reported net income of $360,000 for the year. Rhodo shares had a fair value of $32 per share at December 31. Peone, Inc., a private Canadian corporation, applies ASPE.

Instructions

5.1Under the assumption that the 20% holding of Rhodo does not give Peone significant influence over Rhodo, identify the two possible accounting methods Peone could use under ASPE to account for its investment.