On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industrys capital stock for $103 million. Jackson Industrys net income for the year ended December 31, 2018, was $133 million. The fair value of the shares held by Sanborn was $124 million at December 31, 2018. During 2018, Jackson declared a dividend of $66 million.

Required:

1. Prepare all appropriate journal entries related to the investment during 2018.

a.) Record the purchase of Jackson Industry capital stock for 103 M

b.) Record Sanborn Tobacco's portion of Jackson Industry's net income of 133 M

c.) Record the investment revenue

d.) Record the FVA

2. Assume that Sanborn sold the stock on January 2, 2019 for $136 million. Prepare the journal entries Sanborn would use to record the sale.

a.) Record the entry to adjust to fair value on the date of sale

b.) Record the sale of stock on Jan. 2, 2019 for 136 M