Fredo, Inc., purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2016. Sonny recognized a total of $340,000 net income during 2016, paid $24,000 of dividends to Fredo during 2016, and at December 31, 2016, the market value of the Sonny investment increased to $1,034,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required:

1.	Prepare the journal entries necessary to account for the Sonny investment, assuming that Fredo accounts for that investment as an available-for-sale investment.

2.	Prepare the journal entries necessary to account for the Sonny investment, assuming that Fredo accounts for that investment as an elects the fair-value option.