Question
On January 2, 2016, Sanborn Tobacco Inc. bought 5% of Jackson Industrys capital stock for $92 million as a temporary investment. Sanborn classified the securities
On January 2, 2016, Sanborn Tobacco Inc. bought 5% of Jackson Industrys capital stock for $92 million as a temporary investment. Sanborn classified the securities acquired as available-for-sale. Jackson Industrys net income for the year ended December 31, 2016, was $122 million. The fair value of the shares held by Sanborn was $102 million at December 31, 2016. During 2016, Jackson declared a dividend of $62 million. |
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Prepare all appropriate journal entries related to the investment during 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
1. Record the purchase of Jackson Industry capital stock for $92. 2. Record the purchase of Jackson Industry capital stock for $92. 3. Record the investment revenue. 4. Record the entry for fair value of adjustment.
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