On January 2, 2021, Sanborn Tobacco Inc. bought 10% of Jackson Industrys capital stock for $91 million. Jackson Industrys net income for the year ended December 31, 2021, was $121 million. The fair value of the shares held by Sanborn was $100 million at December 31, 2021. During 2021, Jackson declared a dividend of $61 million.

2. Assume that Sanborn sold the stock on January 2, 2022 for $112 million. Prepare the journal entries Sanborn would use to record the sale.

Req 1. Record the entry to adjust to fair value on the date of sale.

Req 2. Record the sale of stock on January 2, 2022 for $112 million.