Exercise 12-27 (Algo) Fair value option; equity method investments (L012-6, 12-8] As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 20% of Nursery Supplies Inc's 5 million shares of capital stock for $20 million. The fair value and book value of the shares were the same at that time. The company realizes that this investment typically would be accounted for under the equity method, but instead chooses to measure the Investment at fair value. During the year , Nursery Supplies reported net income of $10 million and distributed cash dividends of $1.00 per share. At the end of the year, the fair value of the shares is $18 million Required: 1. How would this investment be classified on Florists balance sheet? 2. Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 frequired 2 Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence (if no entry is required for a transaction/event, select "No journal entry required" in the first account field Enter your answers in millions. Ce 10,000,000 should be entered as 10) Show less Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (e., 10,000,000 should be entered as 10).) Show less No Transaction General Journal Debit Credit Investment in equity affiliate 20,000,000 Cash 20,000,000 1 1 2 2 Cash 1,000,000 Interest revenue 1,000,000 3 3 Gain on investments (unrealized, NI) Fair value adjustment 2,000,000 2,000,000