Recording Entries for Equity Investment: Equity Method, Partial Year On July 1 , Allen Corporation purchased 30% of the 48,000 outstanding common shares of Towne Corporation at $17 per share as a long-term investment. 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 $38,400. Towne Corporation declared and paid cash dividends of $12,800 on December 30 to shareholders on record. As of December 31 , common shares of Towne Corporation were trading at $20 per share. a. Record Allen's entries on (1) July 1, (2) December 30, and (3) December 31, assuming that Allen Corporation had significant influence over Towne Corporation. - Note: If a journal entry isn't required on any of the dates shown, select "N/Adebit" and "N/Acredit" as the account names and leave the Dr. and Cr. answers blank (zero). \begin{tabular}{|c|c|c|c|} \hline Date & Account Name & Dr. & Cr. \\ \hline \multirow[t]{3}{*}{ 1. Jul. 1} & & & \\ \hline & & & \\ \hline & To record investment purchase. & & \\ \hline \multirow[t]{3}{*}{ 2. Dec. 30} & & & \\ \hline & & & \\ \hline & To record receipt of dividends. & & \\ \hline \multirow[t]{3}{*}{ 3. Dec. 31} & & & \\ \hline & & & \\ \hline & To record proportionate share of investee's net income. & & \\ \hline \multirow[t]{3}{*}{ Dec. 31} & & & \\ \hline & & & \\ \hline & To adjust investment to fair value. & & \\ \hline \end{tabular} b. Indicate the effects of this investment on Allen's income statement and its year-end balance sheet (ignoring any effects on cash). - Note: Indicate a loss with a negative sign