Fair value and equity methods. Prepare journal entries for thefollowing transactions, assuming ABC uses (a) the fair value methodand (b) the equity method for accounting for its investments in XYZCo. a. At the beginning of Year 2014, ABC bought 20% of XYZ'scommon stock at its book value. Total book value of all XYZ'scommon stock was $800,000 on this date. b. During Year 2014, XYZreported $60,000 of net income and paid $30,000 of dividends. c.During Year 2015, XYZ reported a net loss of $10,000 and paid$5,000 of dividends.
