On January 1, 20X0, Hunter Corporation issued 7,000 of its $15 par value shares to acquire 45 percent of the shares of Arrow Manufacturing. Arrow Manufacturing's balance sheet immediately before the acquisition contained the following items:

ARROW MANUFACTURING
Balance Sheet
January 1, 20X0
	Book Value				Fair Value
Assets
Cash and Receivables		$	30,000			$	30,000
Land			78,000				88,000
Buildings & Equipment (net)			123,000				153,000
Patent			88,000				88,000
Total Assets			319,000
Liabilities & Equities
Accounts Payable		$	119,000				119,000
Common Stock			145,000
Retained Earnings			55,000
Total Liabilities & Equities		$	319,000

On the date of the stock acquisition, Hunter's shares were selling at $40, and Arrow Manufacturing's buildings and equipment had a remaining economic life of 5 years. The amount of the differential assigned to goodwill is not impaired.

In the two years following the stock acquisition, Arrow Manufacturing reported net income of $80,000 and $50,000 and paid dividends of $25,000 and $40,000, respectively. Hunter used the equity method in accounting for its ownership of Arrow Manufacturing.

Required:

a.

Prepare the entry recorded by Hunter Corporation at the time of acquisition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

*Record the acquisition of Arrow Manufacturing stock.

b-1.

Prepare the journal entries recorded by Hunter during 20X0 related to its investment in Arrow Manufacturing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

*Record the acquisition of Arrow Manufacturing stock.

*Record the dividends from Arrow Manufacturing.

*Record the equity-method income.

*Record the entry to amortize the differential assigned to buildings and equipment.

b-2.

Prepare the journal entries recorded by Hunter during 20X1 related to its investment in Arrow Manufacturing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

*Record the dividends received from Arrow Manufacturing.

*Record the equity-method income for period.

*Record the entry to amortize the differential assigned to buildings and equipment.