On July 1, 2021, Clearwater Inc. purchased 8,000 shares of the outstanding common stock of Mountain Corporation at a cost of $180,000. Mountain had 32,000 shares of outstanding common stock. The total book value and total fair value of Mountain’s individual net assets on July 1, 2021, are both $720,000. The total fair value of the 32,000 shares of Mountain’s common stock on December 31, 2021, is $770,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2021: Dividends declared and paid, January 1–June 30 $ 12,200 Dividends declared and paid, July 1–December 31 $ 12,200 Net income, January 1–June 30 $ 14,200 Net income, July 1–December 31 $ 18,200 Required: 1. Prepare the necessary entries for 2021 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securities were accounted for under the fair value through net income method.