QS 15-10 Recording long-term equity securities LO P3

On May 20, 2017, Montero Co. paid $1,080,000 to acquire 33,000 common shares (10%) of ORD Corp. as a long-term investment. On August 5, 2018, Montero sold one-half of these shares for $641,000. 1. What valuation method should be used to account for this stock investment?

2. Prepare entries to record both the acquisition and the sale of these shares.

Equity method Fair value method