FAIR VALUE METHOD FOR LONG-TERM INVESTMENTS IN COMMON STOCK. On January 1, 19x6, Stanton, Inc., acquired 12% of the outstanding common stock (2,400 of 20,000 outstanding shares) of Calamity Corporation for $84,000 cash

($35 per share, including commissions). This is the only long-term investment in equity securities held by Stanton. Calamity declares and pays dividends on November 1 of each year—$3 per share on November 1, 19x6, and $3.50 per share on November 1, 19x7. On April 1, 19x7, Stanton sold 800 shares of its investment in Calamity for $31 per share. On December 31, 19x6, Calamity’s stock was selling for $32 per share; 1 year later, on December 31, 19x7, Calamity’s stock was selling for $33.50 per share.

REQUIRED:

1. Write the journal entries made by Stanton, Inc., to record the events related to its investment in Calamity.

2. Give the title and amount of each item (except cash) on the December 31, 19x7, balance sheet related to the investment. Name the balance sheet section in which each item appears.