Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (A$) was A$200,000, and A$40,000 of the differential was allocated to plant and equipment, which is amortized over a 10-year period. The remainder of the differential was attributable to a patent. Palermo Inc. amortizes the patent over 10 years. Salina Ranchings trial balance on December 31, 20X3, in Australian dollars is as follows: Debits Credits Cash A$ 44,100 Accounts Receivable (net) 72,000 Inventory 86,000 Plant and Equipment 240,000 Accumulated Depreciation A$ 60,000 Accounts Payable 53,800 Payable to Palermo Inc. 10,800 Interest Payable 3,000 12% Bonds Payable 100,000 Premium on Bonds 5,700 Common Stock 90,000 Retained Earnings 40,000 Sales 579,000 Cost of Goods Sold 330,000 Depreciation Expense 24,000 Operating Expenses 131,500 Interest Expense 5,700 Dividends Paid 9,000 Total A$ 942,300 A$ 942,300 Additional Information: 1.Salina Ranching uses average cost for cost of goods sold. Inventory increased by A$20,000 during the year. Purchases were made uniformly during 20X3. The ending inventory was acquired at the average exchange rate for the year. 2.Plant and equipment were acquired as follows: Date Cost January 20X1 A$ 180,000 January 1, 20X3 60,000 3.Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value. 4.The payable to Palermo is in Australian dollars. Palermos books show a receivable from Salina Ranching of $6,480. 5.The 10-year bonds were issued on July 1, 20X3, for A$106,000. The premium is amortized on a straight-line basis. The interest is paid on April 1 and October 1. 6.The dividends were declared and paid on April 1. 7.Exchange rates were as follows: A$ $ January 20X1 1 = 0.93 August 20X1 1 = 0.88 January 1, 20X3 1 = 0.70 April 1, 20X3 1 = 0.67 July 1, 20X3 1 = 0.64 December 31, 20X3 1 = 0.60 20X3 average 1 = 0.65 Assume that the Australian dollar (A$) is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina Ranching. Required: a. Prepare the entries that Palermo would record in 20X3 for its investment in Salina Ranching. Your entries should include the following:(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)