7. On January 1, 2019, Jersey Company acquired all of the outstanding stock of State Co. by paying $50,000 in cash and issuing $100,000 in long term debt. State Co. maintained separate incorporation and immediately upon this acquisition became a wholly owned subsidiary of Jersey Company. No allocation to goodwill or other specific account was made. Assume the equity method is applied. On January 1, 2019 (immediately prior to the acquisition) the balance sheet account balances for Jersey Company and State Co. were as follows: Cash Receivables Inventory Buildings (net) Equipment (net) Accounts Payable Notes Payable Long-term Liabilities Common stock Additional paid-in capital Retained earnings Jersey Company State Co. 400,000 10,000 550,000 50,000 100,000 25,000 200,000 85,000 150,000 25,000 (50,000) (15,000) (100,000) (10.000) (250,000) (20,000) (250,000) (50,000) (550,000) (80,000) (200,000) (20,000) *Parentheses designate credit balances. a) Write the journal entry made by Jersey Company (the Parent) on January 1, 2019 in order to record its acquisition of State Co. b) Write the consolidation journal entry (S) made on January 1, 2019 in order to report the combined entity's consolidated financials to the public. 7. On January 1, 2019, Jersey Company acquired all of the outstanding stock of State Co. by paying $50,000 in cash and issuing $100,000 in long term debt. State Co. maintained separate incorporation and immediately upon this acquisition became a wholly owned subsidiary of Jersey Company. No allocation to goodwill or other specific account was made. Assume the equity method is applied. On January 1, 2019 (immediately prior to the acquisition) the balance sheet account balances for Jersey Company and State Co. were as follows: Cash Receivables Inventory Buildings (net) Equipment (net) Accounts Payable Notes Payable Long-term Liabilities Common stock Additional paid-in capital Retained earnings Jersey Company State Co. 400,000 10,000 550,000 50,000 100,000 25,000 200,000 85,000 150,000 25,000 (50,000) (15,000) (100,000) (10.000) (250,000) (20,000) (250,000) (50,000) (550,000) (80,000) (200,000) (20,000) *Parentheses designate credit balances. a) Write the journal entry made by Jersey Company (the Parent) on January 1, 2019 in order to record its acquisition of State Co. b) Write the consolidation journal entry (S) made on January 1, 2019 in order to report the combined entity's consolidated financials to the public