EXERCISE $4-9$

Interim Purchase, Equity Method LO $2$ LO $6$

On October $1,2020,$ Para Company purchased $90\%$ of the outstanding

common stock of Star Company for $$210,000.$ Additional data concerning Star

Company for $2020$ follows:

Any difference between book value and the value implied by the purchase

price relates to goodwill. Para Company uses the partial equity method to

record its investment in Star Company.

Required:

A$.$ Prepare on Para Company's books journal entries to record the

investment$-$related activities for $2020.$

B$.$ Prepare workpaper eliminating entries for a workpaper on December $31,$

Star Company's net income is earned evenly throughout the year.

Answer Both parts of the question in excel workbook format, thanks.