On January 1, 2016, Aronsen Company acquired 80 percent of Siedel Companys outstanding shares. Siedel had a net book value on that date of $480,000: common stock ($10 par value) of $200,000 and retained earnings of $200,000.

Aronsen paid $480,000 for this investment. The acquisition-date fair value of the 20 percent noncontrolling interest was $120,000. The excess fair value over book value associated with the acquisition was used to increase land by $60,000 and to recognize copyrights (10-year remaining life) at $60,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account.

In the 20162017 period, the subsidiarys retained earnings increased by $230,000. During 2018, Siedel earned income of $93,000 while declaring $33,000 in dividends. Also, at the beginning of 2018, Siedel issued 5,000 new shares of common stock for $48 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry.