3. On December 31, 2019, Purple Company purchased 80% of the common stock of Sage Company for $1,300,000. On this date, Sage had total owners' equity of $650,000 (common stock $100,000; other paid-in capital, $250,000; and retained earnings, $300,000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities. Assets and liabilities with differences in book and fair values are provided in the following table:

	Book	Fair
	Value	Value
Current assets	$500,000	$700,000
Accounts receivable	200,000	150,000
Inventory	800,000	850,000
Land	100,000	450,000
Buildings and equipment, net	700,000	800,000
Current liabilities	800,000	850,000
Bonds payable	850,000	900,000

Remaining excess, if any, is due to goodwill.

1. Prepare the elimination journal entries.