On January $1,20$X$0,$ Pepper Corporation issued $8,000$ of its $$15$ par value shares to acquire $45$ percent of the shares of Salt Manufacturing. Salt Manufacturing$$s balance sheet immediately before the acquisition contained the following items:

SALT MANUFACTURING

Balance Sheet

January $1,20$X$0$

Book Value Fair Value

Assets

Cash and Receivables $ $30,000$ $ $30,000$

Land $89,00099,000$

Buildings and Equipment $($net$)122,000152,000$

Patent $99,00099,000$

Total Assets $340,000$

Liabilities & Equities

Accounts Payable $ $162,000162,000$

Common Stock $134,000$

Retained Earnings $44,000$

Total Liabilities & Equities $ $340,000$

On the date of the stock acquisition, Pepper's shares were selling at $$40,$ and Salt Manufacturing$$s buildings and equipment had a remaining economic life of $5$ 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 $$87,000$ and $$57,000$ and paid dividends of $$21,000$ and $$47,000,$ respectively. Pepper used the equity method in accounting for its ownership of Salt Manufacturing.

Required:

a$.$ Prepare the entry recorded by Pepper Corporation at the time of acquisition.

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

$1.$ Record the acquisition 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.

$1.$ Record the acquisition of Salt Manufacturing.

$2.$ Record the dividends received from Salt Manufacturing.

$3.$ Record the equity$-$method income for period.

$4.$ Record the entry to amortize the differential assigned to buildings and equipment.

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.

$1.$ Record the dividends received from Salt Manufacturing.

$2.$ Record the equity$-$method income for period.

$3.$ Record the entry to amortize the differential assigned to buildings and equipment.

c$.$ What balance will be reported in Pepper's investment account on December $31,20$X$1?$