On January $1,20$X$0,$ Pepper Corporation issued $7,000$ of its $$10$ par value shares to acquire $45$ percent of the shares of Salt

Manufacturing. Salt Manufacturing's balance sheet immediately before the acquisition contained the following items:

On the date of the stock acquisition, Pepper's shares were selling at $$35,$ and Salt Manufacturing's buildings and equipment had a

remaining economic life of $10$ years. The amount of the differential assigned to goodwill is not impaired.

In the two years following the stock acquisition, Salt Manufacturing reported net income of $$89,000$ and $$59,000$ and paid dividends

of $$30,000$ and $$49,000,$ respectively. Pepper used the equity method in accounting for its ownership of Salt Manufacturing.

b$-1.$ Prepare the journal entries recorded by Pepper during $20$X$0$ related to its investment in Salt Manufacturing.

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

Journal entry worksheet

Record the dividends received from Salt Manufacturing.

Note: Enter debits before credits.

b$-1.$ Prepare the journal entries recorded by Pepper during $20$X$0$ related to its investment in Salt Manufacturing.

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

Journal entry worksheet

Record the equity$-$method income for period.

Note: Enter debits before credits.

b$-1.$ Prepare the journal entries recorded by Pepper during $20$X$0$ related to its investment in Salt Manufacturing.

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

Journal entry worksheet

Record the entry to amortize the differential assigned to buildings and

equipment.

Note: Enter debits before credits.

b$-2.$ Prepare the journal entries recorded by Pepper during $20$X$1$ related to its investment in Salt Manufacturing.

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

Journal entry worksheet

A

C

Record the equity$-$method income for period.

Note: Enter debits before credits.

b$-2.$ Prepare the journal entries recorded by Pepper during $20$X$1$ related to its investment in Salt Manufacturing.

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

Journal entry worksheet

B

C

Record the entry to amortize the differential assigned to buildings and

equipment.

Note: Enter debits before credits.