On july 1, 2016, killearn company acquired 88,000 of the outstanding shares of shaun company for $13 per share. this acquisition gave killearn a 25 percent ownership of shaun and allowed killearn to significantly influence the investee's decisions. as of july 1, 2016, the investee had assets with a book value of $3 million and liabilities of $74,400. at the time, shaun held equipment appraised at $364,000 above book value; it was considered to have a seven-year remaining life with no salvage value. shaun also held a copyright with a five-year remaining life on its books that was undervalued by $972,000. any remaining excess cost was attributable to goodwill. depreciation and amortization are computed using the straight-line method. killearn applies the equity method for its investment in shaun. shaun's policy is to declare and pay a $1 per share cash dividend every april 1 and october 1. shaun's income, earned evenly throughout each year, was $598,000 in 2016, $639,600 in 2017, and $692,400 in 2018. in addition, killearn sold inventory costing $91,200 to shaun for $152,000 during 2017. shaun resold $92,000 of this inventory during 2017 and the remaining $60,000 during 2018. determine the equity income to be recognized by killearn during each of these years. compute killearn's investment in shaun company's balance as of december 31, 2018.