8-3 Parent Company and Workpaper Entries - New Shares Issued by Subsidiary On January 1, 2011, Pace Company purchased 250,000 shares of common stock directly from its subsidiary, Sime Company, for $ Noncontrolling stockholders elected not to participate in the new issue. Pace Company acquired its initial 92.5% interest in Sime Company by purchasing on the open market 462,500 shares of Sime's c $578,125 on January 1, 2007. Sime Company's stockholders' equity just before each of the two purchases was as follows: December 31, 2006 December 31, 2010 Common Stock $1 par $ 500,000 $500,000 Other Contributed Capital 40,000 40,000 Retained Earnings 60,000 150,000 Total $600,000 $690,000 During 2011 Sime Copany reported $90,000 net income and declared a dividend in the amount of $30,000. Any difference betwe values relates to subsidiary land. Pace uses the cost method to account for its investment. Required: A. Prepare the journal entry on Pace Company's books to record the purchase of the additional shares on January 1, 2011. B. Prepare the eliminating entries needed for the preparation of a consolidation statements workpaper on December 31, 2011