P company purchased a 70% interest in S company on January 1, 2015 for $3,000,000. The book value and fair value of the assets and liabilities of S company on that day were:

BOOK VALUE FAIR VALUE

Current assets $700,000 700,000

Equipment 1,600,000 2,000,000

Land 500,000 700,000

Deferred charge 400,000 400,000

Total Assets 3,200,000 3,800,000

Less: Liabilities (700,000) (700,000)

Net Assets: 2,500,000 3,100,000

The equipment had a remaining useful life of 8 years on January 1, 2015 and the deferred charge was being amortized over a period of 8 years from that date. ALL Inventory is sold within the year becoming COGS. C/S was $1,700,000 and Retained Earnings was $110,000 on that same date. P company uses partial-equity method to record its investment within S company.

Create the December 31, 2015 work paper entries that:

1. Eliminate the investment account
2. Allocate and amortize the difference between implied value and book value