The following information applies to the questions displayed below.]

As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 580,000 shares for $660,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMCs net assets were equal. During the year, AMC earned net income of $430,000 and distributed cash dividends of 35 cents per share. At year-end, the fair value of the shares is $703,000.

2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year

• Record Painters' Equipment's share of AMC Supplies' $430,000 net income.

• Record the cash dividend of 35 cents per share.

• Record any necessary year-end adjusting journal entry when the fair value of the shares held are $703,000 at year-end.