A parent company acquires all of he outstanding common stock of its subsidiary for cash purchase price of $300,000. On the acquisition date, the subsidiary reported $100,000 for Common Stock and $60,000 for Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets, except for an unrecorded patent, which has a fair value of $120,000.

a. Prepare the entry that the parent makes to record the investment.

b. Prepare the [E] and [A] consolidation entries.