Fredo, Inc., purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2016. Sonny recognized a total of $380,000 net income during 2016, paid $28,000 of dividends to Fredo during 2016, and at December 31, 2016, the market value of the Sonny investment increased to $1,038,000. (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.

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 View transaction list Journal entry worksheet Record the entry for investment in Sonny Enterprises. Note: Enter debits before credits. Transaction General Journal DebitCredit Record entry Clear entry View general journal 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. View transaction list Journal entry worksheet Record the entry for investment in Sonny Enterprises. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal