Sage Corp. is a medium-sized corporation specializing in quarrying stone for building construction. The company has long dominated the market, at one time achieving a 70% market penetration. During prosperous years, the company's profits, coupled with a conservative dividend policy, resulted in funds available for outside investment. Over the years, Sage has had a policy of investing idle cash in equity securities. In particular, Sage has made periodic investments in the company's principal supplier, Norton Industries. Although the firm currently owns 12% of the outstanding common stock of Norton Industries, Sage does not have significant influence over the operations of Norton Industries. Cheryl Thomas has recently joined Sage as assistant controller, and her first assignment is to prepare the 2020 year-end adjusting entries for the accounts that are valued by the "fair value rule for financial reporting purposes. Thomas has gathered the following information about Sage' pertinent accounts. 1. Sage has equity securities related to Delaney Motors and Patrick Electric. During 2020, Sage purchased 93,000 shares of Delaney Motors for $1,495,000; these shares currently have a fair value of $1,620,000. Sage' investment in Patrick Electric has not been profitable; the company acquired 45,000 shares of Patrick in April 2020 at $20 per share, a purchase that currently has a value of $689,000. Prior to 2020, Sage invested $22,665,000 in Norton Industries and has not changed its holdings this year. This investment in Norton Industries was valued at $21,489,000 on December 31, 2019. Sage' 12% ownership of Norton Industries has a current fair value of $22,291,000 on December 2020. 2. Prepare the appropriate adjusting entries for Sage as of December 31, 2020, to reflect the application of the "fair value rule for the securities described above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Prepare the entries for the Norton investment, assuming that Sage owns 25% of Norton's shares. Norton reported income of $508,000 in 2020 and paid cash dividends of $103,000. (Credit account titles are automatically indented when 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.) Debit Credit No. Account Titles and Explanation (1) (To record revenue.) (2) 1 (To record dividends.) List of Accounts Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss -Income