#6a

On January 1, 20X0. Pepper Corporation issued 8,000 of Its $15 par value shares to acquire 45 percent of the shares of Salt Manufacturing. Salt Manufacturing's balance sheet immediately before the acquisition contained the following items: On the date of the stock acquisition, Pepper's shares were selling at $40, and Salt Manufacturing's bulldings and equipment had a remaining economic life of 10 years. The amount of the differentlal assigned to goodwill is not impaired. In the two years following the stock acquisition, Salt Mynufacturing reported net Income of $85,000 and $55,000 and paid dividend of $28,000 and $45,000, respectively. Pepper used the equity method in accounting for its ownership of Salt Manufacturing. Required: a. Prepare the entry recorded by Pepper Corporation at the time of acquisition. Note: If no entry Is required for a transactlon/event, select "No journal entry required" In the first account fleld. b-1. Prepare the journal entries recorded by Pepper during 200 related to Its Investment in Salt Manufacturing. Note: If no entry Is required for a transaction/event, select "No journal entry required" In the flrst account fleld. A Record the acquisition of Salt Manufacturing