On July 1, 2021, Tremen Corporation acquired 25% of the shares of Delany Company. Tremen paid $3,130,000 for the investment, and that amount is exactly equal to 25% of the book value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,500,000 for 2021, and paid $170,000 of dividends each quarter to its shareholders. After all closing entries are made for the year ended December 31, 2021, Tremen's "Investment in Delany Company" account would have a balance of:

Multiple Choice $3,521,250. $3,232,500. $3,317,500. $3,462,500.

Fredo, Inc., purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2021. Sonny recognized a total of $330,000 net income during 2021, paid $23,000 of dividends to Fredo during 2021, and at December 31, 2021, the market value of the Sonny investment increased to $1,033,000.

Required:
Prepare the journal entries necessary to account for the Sonny investment, assuming that Fredo (1) does not have significant influence or (2) does have significant influence over the operating and financial policies of the investee.