Sale of shares in subsidiary by parent resulting in loss of control   LO5 Insomnia Ltd acquired 80% of the issued shares of Sleepy Ltd on 1 July 2018 for $20 375 when the shareholders’ equity of Sleepy Ltd consisted of: Share capital $12 500 Retained earnings 10 000 All the identifiable assets and liabilities of Sleepy Ltd were recorded at amounts equal to their fair values, except for plant for which the fair value was $1250 greater than the carrying amount. The remaining economic life of the plant was 5 years. The fair value of the non‐controlling interest was $5000. The full goodwill method was used on consolidation. On 1 July 2020, Insomnia Ltd sold 40% of the issued shares of Sleepy Ltd (i.e. 1/2 of its holdings) for $12 500. Shareholders’ equity of Sleepy Ltd at this date consisted of share capital of $12 500 and retained earnings of $12 500. As a result of this sale, Insomnia Ltd lost control of Sleepy Ltd. Required 1. Prepare the journal entries in Insomnia Ltd to record the sale of shares in Sleepy Ltd and any gain/loss on sale. 2. Prepare the consolidation worksheet entries at 1 July 2020 immediately after Insomnia Ltd sold its shares in Sleepy Ltd.