On January 1,2016,Preston Corporation Acquired an 80% Interest in Spiegel

Essay

On January 1,2016,Preston Corporation acquired an 80% interest in Spiegel Company for $2,400,000.At that time Spiegel Company had common stock of $1,800,000 and retained earnings of $800,000.The book values of Spiegel Company's assets and liabilities were equal to their fair values except for land and bonds payable.The land's fair value was $120,000 and its book value was $100,000.The outstanding bonds were issued on January 1,2005,at 9% and mature on January 1,2018.The bond principal is $600,000 and the current yield rate on similar bonds is 8%.
Required:
Prepare the workpaper entries necessary on December 31,2016,to allocate,amortize,and depreciate the difference between implied and book value.