In January 2012, Wallace, Inc. acquired a 25% interest in Minaj, Inc. for $1,750,000, giving Wallace significant influence over Minaj. Any excess of purchase price over book value was considered goodwill. In 2012, Minaj reported net income of $525,000 and paid total dividends amounting to $175,000.
Required: Prepare Wallace’s 2012 journal entries related to its investment in Minaj.