On January 1, 20X9, Parent Corporation acquired 90 percent ofSmall Corporation's stock for $315,000...

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On January 1, 20X9, Parent Corporation acquired 90 percent ofSmall Corporation's stock for $315,000 cash. At that date, the fairvalue of the noncontrolling interest was $35,000, and smallreported common stock outstanding of $150,000 and retained earningsof $180,000. The differential is assigned to a patent with aremaining life of eight years. Each year since acquisition, smallhas reported income from operations of 50,000 and paid dividend of$30,000.
Small acquired 75 percent ownership of cherry company on January1, 20x9 for 187,500. at that date, fair value of the noncontrollinginterest was 62,500, and cherry reported common stock outstandingof $100,000 and retained earnings of $130,000. In 20x9, cherryreported net income of $20,000 and paid dividends of $8,000. thedifferential is assigned to building and equipment with an economiclife of 10 years at the date of acquisition.
required: prepare the journal entries recorded by small for itsinvestment in cherry during 20x9.

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As per the given information the following are the journal entries by small investment in cherry corporation Date Account titles and explanation Debit Credit Januray 1 2019 Investment See Answer

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In: AccountingOn January 1, 20X9, Parent Corporation acquired 90 percent ofSmall Corporation's stock for $315,000 cash....On January 1, 20X9, Parent Corporation acquired 90 percent ofSmall Corporation's stock for $315,000 cash. At that date, the fairvalue of the noncontrolling interest was $35,000, and smallreported common stock outstanding of $150,000 and retained earningsof $180,000. The differential is assigned to a patent with aremaining life of eight years. Each year since acquisition, smallhas reported income from operations of 50,000 and paid dividend of$30,000.Small acquired 75 percent ownership of cherry company on January1, 20x9 for 187,500. at that date, fair value of the noncontrollinginterest was 62,500, and cherry reported common stock outstandingof $100,000 and retained earnings of $130,000. In 20x9, cherryreported net income of $20,000 and paid dividends of $8,000. thedifferential is assigned to building and equipment with an economiclife of 10 years at the date of acquisition.required: prepare the journal entries recorded by small for itsinvestment in cherry during 20x9.