E5-3 Consolidation Entries with Differential LO 5-2 On June 10, 20X8, Private Corporation acquired 70 percent of Secret Company's common stock. The fair value of the noncontrolling interest was $22,200 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows: Secret Company Book Value Fair Value $ 10,000 $ 10,000 15,000 15,000 25,000 30,000 57,000 77,000 Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Secret Company Total Accounts Payable Bonds Payable Common Stock Retained Earnings Total Private Corp. Book Value $ 41,800 48,000 89,000 140,000 51,800 $ 370,600 $ 17,000 247,600 43,000 63,000 $ 370,600 $ 107,000 $ 2,000 56,000 16,000 33,000 $ 107,000 $ 132,000 2,000 56,000 $ 58,000 Required: a. Record the consolidation entries required to prepare a consolidated balance sheet immediately after the purchase of Secret Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Consolidation Worksheet Entries Record the basic consolidation entry. Note: Enter debits before credits. Entry Accounts Debit Credit 1 Common stock Retained earnings Investment in Secret Company NCI in NA of Secret Company Record entry Clear entry view consolidation entries Consolidation Worksheet Entries Record the excess value (differential) reclassification entry. Note: Enter debits before credits. Entry Accounts Debit Credit 2 Inventory Buildings and equipment Investment in Secret Company NCI IN NA of Secret Company Record entry Clear entry view consolidation entries