Ennis Corporation acquired 35 percent of Jackson Corporation€™s stock on January 1, 20X8, by issuing 25,000 shares of its $2 par value common stock. Jackson Corporation€™s balance sheet immediately before the acquisition contained the following items:

Shares of Ennis were selling at $8 at the time of the acquisition. On the date of acquisition, the remaining economic life of buildings and equipment held by Jackson was 20 years. The amount of the differential assigned to goodwill is not impaired. For the year 20X8, Jackson reported net income of $70,000 and paid dividends of $10,000.

Required
a. Give the journal entries recorded by Ennis Corporation during 20X8 related to its investment in Jackson Corporation.
b. What balance will Ennis report as its investment in Jackson at December 31,20X8?

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JACKSON CORPORATION Balance Sheet January 1, 20X8 Book Value Fair Value Assets Cash & Receivables Inventory (FIFO basis) Land Buildings & Equipment (net) Total Assets 40,000 80,000 50,000 240,000 $410,000 40,000 100,000 70,000 320,000 $530,000 Liabilities & Equities Accounts Payable Common Stock Retained Earnings Total Liabilities & Equities s 70,000 $ 70,000 130,000 210,000 $410,000