Cash account name and amount is correct. Fair Value adjustment name is right amo

Question

Cash account name and amount is correct.

Fair Value adjustment name is right amount is wrong.

Investment name and amount are correct.

Unrealized holding gain name and amount are incorrect.

On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry's capital stock for $90 million. Jackson Industry's net income for the year ended December 31, 2018, was $120 million. The fair value of the shares held by Sanborn was $98 million at December 31, 2018. During 2018, Jackson declared a dividend of $60 million. Required 1. Prepare all appropriate journal entries related to the investment during 2018 2. Assume that Sanborn sold the stock on January 2, 2019 for $110 million. Prepare the journal entries Sanborn would use to record the sale Complete this question by entering your answers in the tabs below Required 1 Required 2 Assume that Sanborn sold the stock on January 2, 2019 for $110 million. Prepare the journal entries Sanborn would use to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet Record the sale of stock on January 2, 2019 for $110 million. Note: Enter debits before credits. Event General Journal Debit Credit Cash 110 Fair value adjustment Investment in Jackson Industry shares Unrealized holding gain-NI 17 90 Record entry Clear entry View general journal K Required 1 Required 2

Explanation / Answer

Solution 1:

Solution 2:

Journal Entries - Sanborn Tobacco Inc. Date Particulars Debit (In million) Credit (In million) 2-Jan-18 Investment in Jackson Industry Shares Dr $90.00                  To Cash $90.00 (To record investment in shares) 31-Dec-18 Cash A/c Dr ($60*5%) $3.00                  To Dividend Revenue $3.00 (Being dividend received) 31-Dec-18 Fair value adjustment Dr $8.00                  To Unrealized holding gain or loss - OCI $8.00 (Being fair value adjustment of investment in jackson shares)

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