Prism Corporation Acquires the Voting Stock of Streetspace Inc

Essay

Prism Corporation acquires the voting stock of Streetspace Inc. on January 1, 2020, for $100,000 in cash. Streetspace's book value at the date of acquisition was:
All of Streetspace's recorded assets and liabilities are carried at fair value, but it has previously unrecorded customer-related intangible assets valued at $28,000 that are capitalizable under the requirements of ASC Topic 805. These intangibles have an estimated life of 5 years, straight-line. Streetspace reports net income of $8,400 and other comprehensive income of $25 for 2020, and declares and pays dividends of $1,000. It is determined through impairment testing that acquired goodwill is impaired by $500 and the customer-related intangible assets are not impaired. Prism uses the complete equity method to account for its investment in Streetspace on its own books.
Required
a. Calculate the amount Prism reports for 2020 as equity in net income of Streetspace on its own books.
b. Present, in journal entry form, the four eliminating entries needed to consolidate the trial balances of Prism and Streetspace at December 31, 2020. Revaluation write-offs are adjustments to operating expenses.