Saxton Corporation purchased 25 percent of Taylor Company's voting stock on January 1, 2013, for $15 million in cash. At the date of acquisition, Taylor reported its total assets at $300 million and its total liabilities at $280 million. Investigation revealed that Taylor's plant and equipment (15-year life) was overvalued by $9 million and it had an unreported customer database (2-year life) valued at $2.5 million. Taylor declares and pays $500,000 in dividends and reports net income of $1.25 million in 2016. Required Prepare the necessary journal entries on Saxton's books to report the above information for 2016 assuming Saxton uses the equity method to report its investment.