Recording Entries for Equity Investment: Equity Method On January 1, Allen Corporation purchased 30% of the 30,000 outstanding common shares of Towne Corporation at $15 per share as a longerme On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. During the year, Towne Corporation reported net income of $24,000. Towne Corporation declared and paid cash dividends of $8,000 on December 30 to shareholders on record. As of December 31 common shares of Towne Corporation were trading at $20 per share. a. Record the entries on (1) January 1, (2) December 30, and (3) December 31 assuming that Allen Corporation had significant influence over Towne Corporation. b. Indicate the effects of this investment on the income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss