5. On January 1, 2021, Gooch Company acquires 80% of the outstanding common stock of House Inc., for a purchase price of $12,400,000. It was determined that the fair value of the noncontrolling interest in the subsidiary is $3,100,000. The book value of the Houses stockholders equity on the date of acquisition is $10,000,000 and its fair value of identifiable net assets is $10,850,000. The acquisition-date acquisition accounting premium (AAP) is allocated $600,000 to equipment with a remaining useful life of 10 years, and $250,000 to a patent with a remaining useful life of 5 years.

The [A] consolidating journal entry (on Gooch's books) to recognize the acquisition date AAP and allocate the ownership interest in those assets to the parent and noncontrolling interests includes:

Select one:

A. Noncontrolling interest, credit, $3,100,000

B. Noncontrolling interest, credit, $1,100,000

C. Equity investment, credit, $5,350,000

D. House's retained earnings, debit, $2,000,000

8. Huey Company acquires 100% of the stock of Solar Corporation on January 1, 2019, for $2,400,000 cash. As of that date Solar had the following account balances:

	Book Value	Fair value
Cash	$630,000	$630,000
Accounts receivable	775,000	775,000
Inventory	350,000	400,000
Building-net (10 year life)	1,000,000	900,000
Equipment-net (5 year life)	300,000	400,000
Land	600,000	900,000
Accounts Payable	125,000	125,000
Bonds Payable (Face amount $1,000,000, due 12/31/2023)	2,000,000	2,050,000
Common stock	500,000
Additional paid-in capital	250,000
Retained earnings	780,000

In 2019 and 2020, Solar had net income of $250,000 and $240,000, respectively. In addition, Solar paid dividends of $16,000 in both years. Inventory is assumed to be sold in 2019. Assume straight line amortization/ depreciation for assets and bonds payable.

What was the amount of excess of acquisition price over book value of Solar's net assets?

Select one:

A. $250,000

B. $1,120,000

C. $570,000

D. $870,000