On January 3, 2023, Riverbed Limited purchased 3,900 (39%) of the common shares of Sonja Corp. for $541,300. The following information is provided about the identifiable assets and liabilities of Sonja at the date of acquisition: Carrying Amount Fair Value Assets not subject to depreciation $507,000 $507,000 Assets subject to depreciation (10 years remaining) 768,000 868,000 Total identifiable assets 1,275,000 1,375,000 Liabilities 105,000 105,000 During 2023, Sonja reported the following information on its statement of comprehensive income: Income before discontinued operations $204,000 Discontinued operations (net of tax) (85,100) Net income and comprehensive income 118,900 Dividends declared and paid by Sonja on November 15, 2023 119.000 Assume that the 39% interest is enough to make Sonja an associate of Riverbed, and that Riverbed is required to apply IFRS for its financial reporting. The fair value of Sonja's shares at December 31, 2023, is $146 per share. (a) Your answer is correct. Prepare the journal entry to record Riverbed's purchase of the Sonja shares on January 3, 2023. (Hint: Any unexplained payment represents unrecognized goodwill of Sonja.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) (b) Date Account Titles and Explanation Jan. 3, 2023 Investment in Associate Cash Debit 541300 Credit 541300 Attempts: 1 of 3 used Your answer is correct. Prepare all necessary journal entries associated with Riverbed's investment in Sonja for 2023. Depreciable assets are depreciated on a straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) (c) Account Titles and Explanation Cash Investment in Associate (To record dividends received) Investment in Associate Loss on Discontinued Operations Investment Income or Loss (To record investment income or loss) Investment Income or Loss Investment in Associate (To record amortization of fair value difference) Debit 46410 46371 33189 3900 Credit 46410 79560 3900 Attempts: 1 of 3 used Your answer is partially correct. Prepare the journal entry if you were informed that Riverbed's long-term business prospects had deteriorated and that the most Riverbed could expect to recover in the future or to sell its investment in Sonja for at December 31, 2023, is $116 per share. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation Dec. 31, 2023 Investment Income or Loss Investment in Associate Debit 84961 Credit 84961