PROBLEM 4: Fredo, Inc., purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2018. Sonny recognized a total of $400,000 net income during 2018, paid $30,000 of dividends to Fredo during 2018, and at December 31, 2018, the market value of the Sonny investment increased to $1,040,000 Required: Prepare the journal entries necessary to account for the Sonny investment, assuming financial policies of the investee. ificant influence or (2) has significant influence over the operating and