Recording Entries for Equity Investment: FV-NI and Equity Method On January 1, Allen Corporation purchased 30% of the 18,000 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 $14,400 and declared and paid dividends of $4,800. As of December 31, common shares of Towne Corporation were trading at $20 per share. Journal Entries with Significant Influence Journal Entries without Significant Influence Financial Statement Presentation a. Assume that Allen Corporation had significant influence over Towne Corporation. Prepare the entries to record the purchase of the investment, the receipt of declared dividends, and the proportionate share of net income. Date Jan. 1 Account Name To record investment purchase. Dec. 31 To record receipt of dividends. Dec. 31 Check Dr. Cr. 0 0 0 0 To record proportionate share of investee's net income. 0 0 0 0 O O 0 0 0 0