On January 1, 20X9, Parent Corporation acquired 90 percent of Small Corporation's stock for $315,000 cash. At

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Question:

On January 1, 20X9, Parent Corporation acquired 90 percent of Small Corporation's stock for $315,000 cash. At that date, the fair value of the noncontrolling interest was $35,000, and small reported common stock outstanding of $150,000 and retained earnings of $180,000. The differential is assigned to a patent with a remaining life of eight years. Each year since acquisition, small has reported income from operations of 50,000 and paid dividend of $30,000.

Small acquired 75 percent ownership of cherry company on January 1, 20x9 for 187,500. at that date, fair value of the noncontrolling interest was 62,500, and cherry reported common stock outstanding of $100,000 and retained earnings of $130,000. In 20x9, cherry reported net income of $20,000 and paid dividends of $8,000. the differential is assigned to building and equipment with an economic life of 10 years at the date of acquisition.

Required:

prepare the journal entries recorded by small for its investment in cherry during 20x9