Question

1) Record the purchase of Jackson Industry capital stock for $91 million.

Required Information [The following information applies to the questions displayed below.] On January 2, 2021, Sanborn Tobacco Inc. bought 10% of Jackson Industry's capital stock for $91 million. Jackson Industry's net income for the year ended December 31, 2021, was $121 million. The fair value of the shares held by Sanborn was $100 million at December 31, 2021. During 2021, Jackson declared a dividend of $61 million. Required: 1. Prepare all appropriate Journal entries related to the Investment during 2021. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account fleld. Enter your answers in millions rounded to 1 decimal place (I.e., 5,500,000 should be entered as 5.5).)

2) Record Sanborn Tobacco's portion of Jackson Industry's net income of $121 million.

3) Record the dividend revenue.

4) Record the fair value adjustment.

Answer 1

Event	Accounting titles and Explanations	Debit (in $ millions )	Credit (in $ millions )
1	Investment in Jackson Industry	$ 91
	Cash		$ 91
	(To record the purchase of Jackson Industry capital stock )
2	No Entry	-	-
3	Cash ( $ 61 x 10% )	$ 6.1
	Dividend revenue		$ 6.1
	(To record dividend revenue)
4	Fair value adjustment ( $ 100 (-) $ 91 )	$ 9
	To Unrealized holding gain or loss - OCI		$ 9
	(To record the fair value adjustment)

Answer 2

for journal entry 4) its dr. fair vale adjustment

                                  cr. gain on investment (unrealized,NI)