Royal, Inc., acquired 40,000 of Crown Corporations outstanding common shares on January 1, 2021, for $270,000. The investment represented a 5% ownership stake in Crown. During 2021, Crown reported net income of $420,000 and paid total dividends of $70,000 on Feb, 14^th, 2021. The fair market value of Crown Corporations stock at Dec. 31, 2021 was $9 per share.

On January 1, 2022, Royal purchased an additional 200,000 shares of Crown for $2,200,000. During 2022, Crown reported net income of $950,000 and paid total dividends of $80,000 on Feb. 14, 2022. The fair market value of Crown Corporations stock at Dec. 31, 2022 was $16 per share.

Crown Corp. did not issue any additional common shares during 2021 or 2022 and its market value at all dates was equal to its book value.

Required:

a. Prepare the entries to record Royals investment in Crown during 2021 and 2022.