The beginning balance sheet of Waterfall Source Co. included a $400,000 investment in Evan stock (20% ownership,

Question:

The beginning of Waterfall Source Co. included a $400,000 investment in Evan stock (20% ownership, Waterfall has significant influence over Evan). During the year, Waterfall Source completed the following investment transactions:
Mar. 3 Purchased 4,000 shares at $11 per share of Lili Software as a long-term equity investment, representing 7% ownership, no significant influence.
May 15 Received a cash of $0.61 per share on the Lili investment.
Dec. 15 Received a cash of $70,000 from Evan investment.
31 Received Evan's annual report showing $300,000 of net income.
31 Received Lili's annual report showing $120,000 of net income for the year.
31 Evan's stock fair value at year-end was $390,000.
31 Lili's fair value at year-end was $12 per share.
Requirements
1. Journalize the transactions for the year of Waterfall Source.
2. Post transactions to T-accounts to determine the December 31, 2018, balances related to the investment and investment income accounts.
3. Prepare Waterfall Source's partial at December 31, 2018, from your answers in Requirement 2.
4. Where is the unrealized holding gain or loss associated with the Lili stock reported?
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