A Co owns 30% of B Co, enough to have significant influence. A accounts for its Investment in B using the equity method, and at Dec 31, year 10 has a value of $400,000. The FMV of 30% of B is $600,000.

On Jan 1, year 11, A Co purchases an additional 25% of B Co. for $500,000. Now A Co. owns 55%, and has control. On Jan 1, year 11 the fair market value of B Co is $2,000,000.

What journal entries will A Co record in its books on Jan 1, 2011? (4 marks)