On January $1,2023,$ Palka, Incorporated, acquired $70$ percent of the outstanding shares of Sellinger Company for $\backslash$$$1,222,900$ in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $\backslash (\backslash$$ $1,470,000\backslash ).$ All assets acquired and liabilities assumed had fair values equal to book values except for a patent $($six$-$year remaining life$)$ that was undervalued on Sellinger's accounting records by $\backslash (\backslash$$ $267,000\backslash ).$ On January $1,2024,$ Palka acquired an additional $25$ percent common stock equity interest in Sellinger Company for $\backslash$$$467,500$ in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.

During the two years following the acquisition, Sellinger reported the following net income and dividends:

Required:

a$.$ Show Palka's journal entry to record its January $1,2024,$ acquisition of an additional $25$ percent ownership of Sellinger Company shares.

b$.$ Prepare a schedule showing Palka's December $31,2024,$ equity method balance for its Investment in Sellinger account. Complete this question by entering your answers in the tabs below.

Required $\backslash ($ B $\backslash )$

Show Palka's journal entry to record its January $1,2024,$ acquisition of an additional $25$ percent ownership of Sellinger Company shares.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

$1$

Record the acquisition of an additional $25$ percent ownership of Sellinger Company shares.

Note: Enter debits before credits. Complete this question by entering your answers in the tabs below.

Prepare a schedule showing Palka's December $31,2024,$ equity method balance for its Investment in Sellinger account.

Note: Amounts to be deducted should be indicated with a minus sign.