Put Corporation’s Investment in Son Company account had a balance of $475,000 at December 31, 2011. This balance consisted of goodwill of $35,000 and 80 percent of Son’s $550,000 stockholders’ equity. On January 2, 2012, Son increased its outstanding shares from 10,000 to 12,000 shares by selling 2,000 additional shares directly to put at $80 per share. Son’s net income for 2012 was $90,000, and in December 2012 it paid $60,000 dividends.
REQUIRED: Prepare all journal entries other than closing entries to account for Put’s investment in Son during 2012. Any difference between fair value and book value is goodwill.