E$4\mathrm{.}5$ Please explain any calculations. Acquisition Cost, Equity Method, Eliminating Entries, Second Year Peak Entertainment acquires all of the stock of Saddlestone Inc. on January $1,2020.$ In preparing to consolidate the trial balances of Peak and Saddlestone at December $31,2021($two years after the acquisition$),$ you assemble the following information: Date$-$of$-$acquisition information: $-$ Value of stock given up to acquire Saddlestone: $\backslash (\backslash$$ $20,000,000\backslash ).5$ Direct merger costs: $\backslash (\backslash$$ $250,000\backslash ).-$ Saddlestone's shareholders' equity: $\backslash (\backslash$$ $7,200,000\backslash ),$ consisting of capital stock, $\backslash (\backslash$$ $2,000,000\backslash )$; retained earnings, $\backslash (\backslash$$ $5,000,000\backslash )$; accumulated other comprehensive income, $\backslash (\backslash$$ $200,000\backslash ).-$ Fair value of earnings contingency agreement to be paid in cash: $\backslash (\backslash$$ $300,000\backslash ).-$ Fair value of previously unrecorded identifiable intangibles $(5-$year life$)$: $\backslash (\backslash$$ $2,000,000\backslash ).$ There are no revaluations of Saddlestone's reported net assets. Information for $2020$ and $2021$ : $-$ Saddlestone's reported net income for $2020$: $\backslash (\backslash$$ $3,000,000\backslash )$; for $2021$: $\backslash (\backslash$$ $3,500,000\backslash ).-$ Saddlestone's reported other comprehensive income for $2020$: $\backslash (\backslash$$ $100,000\backslash )$ net income; for $2021$: $\backslash (\backslash$$ $25,000\backslash )$ net loss. $-$ Saddlestone declared and paid dividends of $\backslash (\backslash$$ $1,000,000\backslash )$ each year. $-$ Goodwill and identifiable intangibles are not impaired in $2020$; goodwill is impaired by $\backslash (\backslash$$ $200,000\backslash )$ in $2021.$ Required a$.$ Prepare the $2020$ and $2021$ journal entries made by Peak to record its investment, using the complete equity method. b$.$ Prepare the consolidation eliminating entries made at December $31,2021.$