On January 1, 2021, Para Company acquired 100 percent of the common stock of Sara Corporation, by issuing 100,000 shares of its $2 par value common stock. The market value of Paras shares at the date of issue was $8.

Sara reported net assets with a book value of $730,000 on that date. The amount paid in excess of book value of Saras net assets was attributed to the increased value of Saras equipment with a remaining useful life of 7 years.

Worm reported net loss of $50,000, paid dividends of $15,000 in 2021,

Required

Assuming the Para Company uses the equity method in accounting for its investment in Sara, prepare all journal entries recorded by Para for 2021