Sheridan Company has several investments in the securities of other companies. The following information regarding these investments is available at December 31, 2020. 1. 2. 3. 4. Sheridan holds bonds issued by Dorsel Corp. The bonds have an amortized cost of $311,000 and their fair value at December 31, 2020, is $410,000. Sheridan intends to hold the bonds until they mature on December 31, 2028. Sheridan has invested idle cash in the equity securities of several publicly traded companies. Sheridan intends to sell these securities during the first quarter of 2021, when it will need the cash to acquire seasonal inventory. These equity securities have a cost basis of $804,000 and a fair value of $926,000 at December 31, 2020. Sheridan has an ownership stake in one of the companies that supplies Sheridan with various components Sheridan uses in its products. Sheridan owns 6% of the common stock of the supplier, does not have any representation on the supplier's board of directors, does not exchange any personnel with the supplier, and does not consult with the supplier on any of the supplier's operating, financial, or strategic decisions. The cost basis of the investment in the supplier is $1,197,000 and the fair value of the investment at December 31, 2020, is $1,559,000. Sheridan does not intend to sell the investment in the foreseeable future. The supplier reported net income of $78,000 for 2020 and paid no dividends. Sheridan purchased 25% of the stock of Slobbaer Co. for $916,000. Sheridan has significant influence over the operating activities of Slobbaer Co. During 2020, Slobbaer Co. reported net income of $309,000 and paid a dividend of $113,000. (b) Prepare any December 31, 2020, journal entries needed for Sheridan relating to Sheridan's various investments in other companies. Assume 2020 is Sheridan's first year of operations. (Credit account titles are automatically indented when the 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.) No. Account Titles and Explanation Debit Credit entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit 1. 2. 3. (To record the increase in value of the securities.) 4. (To record the increase in the value of the investment in the supplier.) (To record income on the equity method.) Credit 3. (To record the increase in value of the securities.) 4. (To record the increase in the value of the investment in the supplier.) (To record income on the equity method.) (To record dividends received from equity-method investee.) eTextbook and Media Save for Later Attempts: 0 of 3 used Submit