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Problem 1Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the investment as having no significant influence.The percentage of investment15% Amount paid$6,000,000On January 1, 2022 Sofie Company makes the following additional investment in Nut Corporation and changes to the equity method of reporting for this investment:The additional percentage ofinvestment25% |Additional amount paid |$15,000,000December 31, 2020December 31, 2021Fair value of the 15% investment isas follows:$6,200,000$6,450,000Nut Corporation reported the following amounts for the years:202020212022Net Income$150,000 $200,000 5250,000Cash dividends (Paid at year-end)$50,000 |$80,000 $100,000Additional information: Nut Corporation reported no comprehensive income and any basis difference is attributed to goodwill.Required: You should use cell references in providing a number or preparing a calculations by referencing the data above. Prepare you answer in the solution area provided.A. Prepare all the journal entries that Sofie Company would record for the investment in Nut Corporation for 2020, 2021, and 2022. Journal entries should be set up in good form.You need to provide dates, use appropriate account titles, and include an explanation below each journal entry.B. Develop a table showing the calculation of what the amount Sofie Corporation will report on the balance sheet for the investment in Nut Corporation on December 31, 2022