[This problem is a variation of P 1210 focusing on the fair value option.]

On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Laverys operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.00 per share on December 15, 2018, and Lavery reported net income of $160 million for the year ended December 31, 2018. The market value of Laverys common stock at December 31, 2018, was $31 per share. On the purchase date, the book value of Laverys net assets was $800 million and:

The fair value of Laverys depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 million.

The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill.

Required:

Assuming Runyan accounts for this investment under the fair value option, prepare all appropriate journal entries in a manner similar to accounting for securities for which there is not significant influence.