(L02,4) (Fair Value Measurement) Presented below is information related to the purchases of common stock by Lilly...

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(L02,4) (Fair Value Measurement) Presented below is information related to the purchases of common stock by Lilly Company during 2017.

Cost Fair Value

(at purchase date) (at December 31)

Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000 Instructions

(Assume a zero balance for any Fair Value Adjustment account.)

(a) What entry would Lilly make at December 31, 2017, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option?

(b) What entry(ies) would Lilly make at December 31, 2017, to record the investments in the Lee and Woods corporations, assuming that Lilly did not select the fair value option for these investments?

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