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327 E 16-16 Equity Method, FV Option Equity Method Investments, Fair Value Option. On January 1, Clayton Incorporated acquired 32% of the outstanding voting shares

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327 E 16-16 Equity Method, FV Option Equity Method Investments, Fair Value Option. On January 1, Clayton Incorporated acquired 32% of the outstanding voting shares of Kola Company at a cost of $2,196,000 by acquiring 72,000 of the total 225.000 outstanding shares at a cost of $30.50 per share. Clayton elected the fair value option. During the year, Kola reported $1,238,000 in net income and declared and paid $1.15 per share dividends. At the end of the year, the fair value of the investment is $2,109.000. Required a. Prepare the journal entry to record the acquisition of the investment securities. Prepare the journal entries at year-end to record the fair value adjustment at the end of the year of acquisition e. Prepare the journal entry to record the sale of 65% of the Kola common shares for $1,675,000 on January 1 of the year following the acquisition

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