On January 2, 2021, Sanborn Tobacco Inc. bought 5% of Jackson Industrys capital stock for $90 million. Jackson Industrys net income for the year ended December 31, 2021, was $120 million. The fair value of the shares held by Sanborn was $98 million at December 31, 2021. During 2021, Jackson declared a dividend of $60 million.

Required: 1. Prepare all appropriate journal entries related to the investment during 2021.

2. Assume that Sanborn sold the stock on January 2, 2022 for $110 million. Prepare the journal entries Sanborn would use to record the sale.