End of the Year of Acquisition Workpaper Entries On January 1, 2005, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. A summary of Salmon Company’s balance sheet on that date revealed the following: LO2 Book Value Fair Value Equipment $ 525,000 $ 705,000 Other Assets 150,000. 150,000 $ 675,000 $ 855,000 Liabilities $ 75,000 $ 75,000 Common Stock 225,000 Retained Earnings 375,000 $ 675,000 The equipment had an original life of 15 years and has a remaining useful life of 10 years.

Required:
For the December 31, 2005, consolidated financial statements workpaper, prepare the workpaper entry to allocate and depreciate the difference between cost and book value assuming:
A. Equipment is presented net of accumulated depreciation.
B. Accumulated depreciation is presented on a separate row in the workpaper and in the consolidated statement of financial position.