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2. (10 points) Fortran Inc. purchased 500,000 shares, representing 20%, of Cobol Company on January 1, 2018 for $(see below). On July 1, 2018, Cobol
2. (10 points) Fortran Inc. purchased 500,000 shares, representing 20%, of Cobol Company on January 1, 2018 for $(see below). On July 1, 2018, Cobol paid dividends of $(see below) to Fortran. Cobol's net income for 2018 was $(see below). 7/1/2018 2018 12/31/2018 Last Name Price Paid Per Share Total Dividends Net Income Market Price/share A-D $12 $1,000,000 $3,000,000 $16 E-L $16 $1,200,000 $3,800,000 $19 M -R $20 $800,000 $2,450,000 S-Z $2,000,000 $5,000,000 $32 $14 $25 a. What method of accounting should Fortran Inc. use to account for the investment in Cobol. b. Prepare the journal entry for the receipt of dividends for Fortran on July 1, 2018. Prepare the necessary journal entry (s) for Fortran as of December 31, 2018. d. What is the value of the investment in Cobol on Fortran's balance sheet at December 31, 2018, if Fortran did not elect the fair value option? C. e. What is the value of the investment in Cobol on Fortran's balance sheet at December 31, 2018, if Fortran elected the fair value option? Prepare the necessary journal entry
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