Sony Corporation purchased 32 percent of Panasonic's voting stock on January 1, 2016, for £4.2 million in cash. At the date of acquisition, Panasonic reported its total assets at £75 million and its total liabilities at £68 million. Investigation revealed that Panasonic's machinery (12-year life) was overvalued by £2.8 million and it had an unreported customer database (4-year life) valued at £900,000. Panasonic declares and pays £160,000 in dividends and reports net income of £310,000 in 2022.

Required: Prepare the necessary journal entries on Sony's books to report the above information for 2022 assuming Sony uses the equity method to report its investment.