On January 1, 20X1. Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $145,800. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 = $0.81. South Bay's book value on January 1, 20X1, was C$95,000. The fair value of South Bay's plant and equipment was C$9,200 more than book value, and the plant and equipment are being depreciated over 10 years with no salvage value. The remainder of the differential is attributable to a trademark, which will be amortized over 10 years. -5 ints During 20x1, South Bay earned C$15,000 in income and declared and paid C$7,800 in dividends. The dividends were declared and paid in Canadian dollars when the exchange rate was C$1 = $0.75. On December 31, 20X1. Par continues to hold the Canadian currency received from the dividend. On December 31, 20x1, the direct exchange rate is C$1 = $0.64. The average exchange rate during 20X1 was C$1 = $0.76. Management has determined that the Canadian dollar is South Bay's appropriate functional currency. Exchange Rate Canadian Dollars Plant and Trademark equipment U.S. Dollars Plant and Trademark equipment C $ 9,200 $ 73,200 $ 0.81 0.76 7,452 S (699) 6,753 $ 59,292 0 59,292 (920) 8.280 $ S 73,200 $ Income Statement: Differential at date of acquisition: Amortization this period: (10 years) Remaining balance: Balance Sheet Remaining balance on 12/31/X1 translated at year-end exchange rates: Difference to OCH_translation adjustment: $ 8,280 C $ 0.64 73,200 5,299 1,454 $ 46,848 12,444 S b. Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20x1 for its investment in South Bay for the following items: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.) View transaction list View journal entry worksheet X No Event Debit Credit A 1 General Journal Investment in South Bay Company Cash 145,800 145,800 B 2 11,400 Investment in South Bay Company Income from South Bay Company 11,400 3 5,850 Foreign currency units (C$) Investment in South Bay Company 5,850 D 4 6,308 Income from South Bay Company Investment in South Bay Company 6,308 E 5 Other comprehensive income - Translation adjustment Investment in South Bay Company