On January 4, 2024, Runyan Bakery paid $348 million for 10 million shares of Lavery Labeling Company common stock. The Investment represents a 30% Interest in the net assets of Lavery and gave Runyan the ability to exercise significant Influence over Lavery's operations. Runyan chose the fair value option to account for this Investment. Runyan received dividends of $2 per share on December 15, 2024, and Lavery reported net income of $270 million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31, 2024, was $34 per share. On the purchase date, the book value of Lavery's Identifiable net assets was $920 million and: a. The fair value of Lavery's depreciable assets, with an average remaining useful life of four years, exceeded their book value by $80 million. b. The remainder of the excess of the cost of the Investment over the book value of net assets purchased was attributable to goodwill Required: 1-a. Prepare all appropriate journal entries related to the Investment during 2024, assuming Runyan accounts for this Investment under the fair value option, and accounts for the Lavery Investment in a manner similar to what it would use for securities for which there is not significant influence. 1-b. Calculate the effect of these journal entries on 2024 net income, and the amount at which the Investment is carried in the December 31, 2024, balance sheet 2-a. Prepare all appropriate journal entries related to the Investment during 2024, assuming Runyan accounts for this Investment under the fair value option, but uses equity method accounting to account for Lavery's Income and dividends, and then records a fair value adjustment at the end of the year that allows it to comply with GAAP 2-b. Calculate the effect of these journal entries on 2024 net income, and the amount at which the Investment is carried in the December 31, 2024, balance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on the balance sheet for requirements 1 and 2) Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28 Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investment under the fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there is not significant influence. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 2 3 4 Record the purchase of Lavery Labeling stock for $348 million. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Req 1A Req 1B > Show less A Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28 Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Effect on net income Investment million million < Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28 Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investment under the fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a fair value adjustment at the end of the year that allows it to comply with GAAP. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet 1 2 3 4 5 Record the purchase of Lavery Labeling stock for $348 million. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry Show less A Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28 Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on the balance sheet for requirements 1 and 2.) Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Net income Investment million million