E 11-9 Journal entries for push-down accounting On January 1, 2016, Pam Corporation acquired a 90 percent interest in Sun Corporation for $1,260,000. The book values and fair values of Sun’s assets and equities on this date are as follows (in thousands):

Book Value Fair Value Cash $ 100 $ 100 Accounts receivable—net 150 150 Inventories 250 300 Land 150 400 Buildings—net 350 500 Equipment—net 400 300

$1,400 $1,750 Accounts payable $ 275 $ 275 Other liabilities 225 275 Capital stock 500 Retained earnings 400

$1,400 REQuIRED 1. Prepare the journal entries on Sun Corporation’s books to push down the values reflected in the acquisition price under parent-company theory.

2. Prepare the journal entries on Sun Corporation’s books to push down the values reflected in the acquisition price under entity theory.