P Corporation acquired a 90% interest in S Company for $3,250,000 on January 1,2016 . At that time, S Company had a common stock of $2,250,000 and retained earnings of $900,000. The balance sheet information available for S Company on January 1,2016 , showed the following: The equipment had a remaining useful life of ten years. S Company reported $120,000 of net income in 2016 and declared $30,000 in dividends. Required: Prepare the work paper entries assuming the cost method is used to eliminate dividends, eliminate the investment account, and allocate and depreciate the difference between implied and book value for 2016