Consolidation entries at date of acquisition (purchase price greater than book value) A parent company exchanges 30,000 shares of its $1 par value common stock, with a market value of $10/share, for all of the shares owned by the subsidiary's shareholders, resulting in a $300,000 total purchase price. On the acquisition date, the subsidiary reported a book value of Stockholders' Equity of $225,000, comprised of $90,000 of Common Stock and $135,000 of Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets except for PPE (net), which has a book value of $120,000 and a fair value of $195,000. a. Prepare the entry that the parent makes to record the investment. General Journal Description Debit Credit Retained earnings Common stock 0 0 PPE (net) 0 0 0 0 b. Prepare the [E] and [A] consolidation entries. Consolidation Worksheet Description [E] Common stock Debit Credit 0 0 0 0 0 0 to eliminate the stockholders' equity of subsidiary on the acquisition date [A] 0 0 0 0 to record the [A] assets purchased on the acquisition date