27. Laurel Limited purchased 40,000 common shares of Hardy Corp for $800,000. During the year, Hardy Corp reported net income of $200,000 and paid total dividends of $90,000. The fair value of the shares on Dec. 31 was $820,000. Instructions (a) Assume that the 40.000 shares represent a 10% interest in Hardy Corp and Laurel Corp has purchased this investment to generate capital gains: (8 marks) 1. How should this investment be classified and accounted for? 2. Prepare the journal entry to record Laurel's investment in Hardy shares. 3. Prepare any entries that Laurel should make in accounting for its investment in Hardy shares during the year. 4. What is the balance of the investment account on Laurel's books at December 31? (b) Repeat requirement (a) above except assume that the 40.000 shares represent a 40% interest in Hardy Corp. (8 marks)