Required information Exercise D-8 Compare the fair value method to the equity method (LO D-2, D-3) [The following information applies to the questions displayed below.) As a long-term investment, Fair Company purchased 20% of Midlin Company's 300,000 shares for $360,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $135,000 and distributed cash dividends of $0.25 per share. At year-end, the fair value of the shares is $375,000. Exercise D-8 Part 1 Required: 1. Assume no significant influence was acquired. Record the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No Transaction General Journal Credit Debit 360,000 Investments Cash 360,000 2 2 No Journal Entry Required 3 Cash 15,000 Dividend Revenue 15,000 Investments 15,000 Cash 15,000 Required information Exercise D-8 Compare the fair value method to the equity method (LO D-2, D-3) (The following information applies to the questions displayed below.) As a long-term investment, Fair Company purchased 20% of Midlin Company's 300,000 shares for $360,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $135,000 and distributed cash dividends of $0.25 per share. At year-end, the fair value of the shares is $375,000. Exercise D-8 Part 2 2. Assume significant influence was acquired. Record the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No Transaction General Journal Credit Debit 360,000 Investments Cash 360,000 - 2 30,000 X Investments Unrealized Holding Loss-Net Income 30,000 X 15,000 Cash Dividend Revenue 15,000 Investments 30,000 30,000 Interest Revenue *Red text Indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted