Table 16-10
on September 1, 2017, Jacob Ltd C) D)

Table 16-10
On September 1, 2017, Jacob Ltd. purchased 100,000 common shares for a 20% interest in BlueSky Drilling Corporation for $15 per share, and paid a $7,000 brokerage commission for the purchase. Jacob Ltd. intends to hold this investment for several years and does not have significant influence over BlueSky Drilling. The market value of the BlueSky Drilling shares at December 31, 2017, is $19 per share. On February 15, 2018 BlueSky Drilling distributed a total dividend to its' shareholders of $50,000. Jacob Ltd. sold one-half of the shares on June 30, 2018 for $16 per share.
-Refer to Table 16-10.Which of the following is the correct journal entry for December 31,2017?

A) No accounting entry is required as no sale took place
B) $$\begin{array} { | c | r | r | } \hline \text { Fair-Value Valuation Allowance } & 400,000 & \\\hline \text { Unrealized Gain on Fair-Value Adjustment } & & 400,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Investment in BlueSky Drilling Common Shares } & 400,000 & \\\hline \text { Equity-Method Investment Revenue } & & 400,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Long-Term Investments } & 400,000 & \\\hline \text { Unrealized Gain on Long-Term Investments } & & 400,000 \\\hline\end{array}$$