Prepare journal entries for the following transactions, assuming ABC uses (a) the fair

value method and (b) the equity method for accounting for its investments in XYZ Co.

Ex. 8. - Equity Investments. Prepare journal entries for the following transactions, assuming ABC uses (a) the fair value method and (b) the equity method for accounting for its investments in XYZ Co. a. At the beginning of the Year 2023, ABC bought 20% of XYZ 's common stock at its book value. The total book value of all XYZ's common stock was $1,000,000 on this date. b. During the Year 2023, XYZ reported net income of $100,000 and paid $50,000 in dividends. c. During the Year 2024, XYZ reported a net loss of $20,000 and paid $7,000 of dividends