Trim Corporation purchased 100 percent of the voting common stock of Round Corporation on January 1, 20X2, for \(\$ 400,000\). At that date, Round reported the following summarized balance sheet data:

Round Corporation reported net income of \(\$ 80,000\) for \(20 \mathrm{X} 2\) and paid dividends of \(\$ 25,000\).
\section*{Required}

a. Give the journal entries recorded by Trim Corporation during 20X2 on its books if Trim accounts for its investment in Round using the equity method.

b. Give the eliminating entries needed at December \(31,20 \times 2\), to prepare consolidated financial statements.

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Assets $700,000 Accounts Payable $100.000 Bonds Payable 200.000 Common Stock 120.000 Retained Earnings 280,000 Total $700.000 Total $700,000