On January 1, 2018 Long Company acquired 80% of the outstanding voting common stock of Fall

Company for $8, 064, 000 cash. Long Company uses the equity method. During 2018 Fall reported

$1,344,000 of net income and paid $576,000 in dividends. The stockholders equity section of

December 31, 201, balance sheet for Fall was as follows:

Stockholders equity

Paid in capital:

Common stock-$84 par $8,400,000

Retained earnings $1,680,000

Prepare the general journal entries to record the investment and the effect of Falls

Income and dividends on Long Companys accounts.

Prepare the elimination entry that would be made on the work sheet for a consolidated

Balance sheet as of the date of acquisition.