Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2020. As of that date, Abernethy has the following trial balance:

During 2020, Abernethy reported net income of $124,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $164,750 while declaring and paying dividends of $60,000.

Assume that Chapman Company acquired Abernethys common stock for $756,500 in cash. As of January 1, 2020, Abernethys land had a fair value of $93,100, its buildings were valued at $194,800, and its equipment was appraised at $366,250. Chapman uses the equity method for this investment.

Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. 2. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 3. Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. 4. Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. 5. Prepare entry D to eliminate intra-entity dividend transfers. 6. Prepare entry E to recognize current year amortization expense. 7. Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. 8. Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. 9. Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. 10. Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method. 11. Prepare entry D to eliminate intra-entity dividend transfers. 12. Prepare entry E to recognize current year amortization expense.