Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $778,400 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $973,000 although Sierra's book value was only $674,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book Value Fair Value Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) $ 60,200 293,000 198,000 242,000 282,000 (188,000) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies. Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $778,400 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed at $973,000 although Sierra's book value was only $674,000. Also, several individual items on Sierra's financial records had fair values that differed from their book values as follows: Book Value Fair Value Land Buildings and equipment (10-year remaining life) Copyright (20-year remaining life) Notes payable (due in 8 years) $ 60,200 293,000 198,000 242,000 282,000 (188,000) For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies