On January 1, Year 4, Cyrus Inc. paid $923,000 in cash to acquire all of the ordinary shares of Kelvin Company. On that date, Kelvin's retained earnings were $209,000. All of Kelvin's assets and liabilities had fair values equal to carrying amounts except for an Investment in bonds, which was worth $13,108 more than carrying amount and will mature on December 31, Year 8. The recoverable amount for goodwill was $120,000 at the end of Years 4 and 5. In Year 4, Cyrus reported net income from its own operations (exclusive of any income from Kelvin) of $134,000 and declared no dividends. In Year 4, Kelvin reported net income of $99,000 and paid a $49,000 cash dividend. Cyrus uses the cost method to report Its Investment in Kelvin and uses the effective interest method to amortize premiums or discounts on Investment in bonds. The amortization of the acquisition differential pertaining to the Investment in bonds was $2,541 in Year 4 and $2,588 in Year 5. The financial statements for Cyrus and Kelvin for the year ended December 31, Year 5, were as follows: Kelvin Revenues and investment income Expenses Cyrus $ 1,018,000 $ (746,000) 934,000 (782,000) Profit $ 272,000 $ 152,000 Retained earnings, 1/1/Year 5 Profit $ 904,000 $ 259,000 272,000 152,000 Dividends paid Retained earnings, 12/31/Year 5 Equipment (net) Investment in Kelvin Investment in bonds Receivables and inventory Cash Total assets Ordinary shares Retained earnings Liabilities Total equities and liabilities (113,000) (51,000) $ 1,063,000 $ 360,000 $ 804,000 $ 388,000 923,000 0 0 320,000 504,000 157,000 574,000 197,000 $ 2,388,000 $ 2,388,000 $ 648,000 1,063,000 677,000 $ 556,000 360,000 563,000 $ 1,479,000 $ 1,479,000 Required: (a) Prepare a schedule of changes to the acquisition differential for Years 4 and 5. (Leave no cells blank - be certain to enter "O" wherever required. Negative/Deductible amounts should be indicated by a minus sign. Omit $ sign in your response.) Balance Jan. 1 Changes Year 4 Year 4 Year 5 Balance Dec. 31 Year 5 Investment in bonds $ $ $ $ Goodwill $ $ $ $