On January $2,2024,$ Sanborn Tobacco Incorporated bought $5\%$ of Jackson Industry$$s capital stock for $$90$ million. Jackson Industry$$s net income for the year ended December $31,2024,$ was $$120$ million. The fair value of the shares held by Sanborn was $$98$ million at December $31,2024.$ During $2024,$ Jackson declared a dividend of $$60$ million.

Required:

$1.$ Prepare all appropriate journal entries related to the investment during $2024.$

$1$Record the purchase of Jackson Industry capital stock for $$90$ million.

$2$Record Sanborn Tobacco's portion of Jackson Industry's net income of $$120$ million.

$3$Record the dividend revenue.

$4$Record the fair value adjustment.

$2.$ Assume that Sanborn sold the stock on January $2,2025$ for $$110$ million. Prepare the journal entries Sanborn would use to record the sale.

$1$Record the entry to adjust to fair value on the date of sale.

$2$Record the sale of stock on January $2,2025$ for $$110$ million.

Journal Entry Names options:

No journal entry required

Cash

Dividend revenue

Fair value adjustment

Gain on investment $($unrealized$,$ NI$)$

Gain on investment $($unrealized$,$ OCI$)$

Insurance expense

Interest receivable

Interest revenue

Investment in equity securities

Loss on investment $($NI$)$

Loss on investment $($unrealized$,$ NI$)$

Loss on investment $($unrealized$,$ OCI$)$

Retained earnings