Parent Company acquires a subsidiary by issuing 100,000 common shares with a market value of $40 per share for all of the subsidiary's common stock. The subsidiary's assets and liabilities were recorded at fair values with the exception of equipment undervalued by $750,000. In addition, there were two unrecorded assets: a secret formula valued at $250,000 and a customer list valued by the subsidiary at $200,000 with any excess going to Goodwill. The balance sheets of the parent and subsidiary immediately after the acquisition are presented below:

	Parent	Subsidiary
Cash	$783,300	$104,000
Accounts Receivable	384,000	696,000
Inventory	582,000	894,000
Equity Investment	4,000,000
Property, plant and equipment (net)	8,499,600	1,654,000
	$14,248,900	$3,348,000
Accounts payable	$188,100	$127,000
Accrued liabilities	220,800	221,000
Long-Term Notes Payable	1,000,000	500,000
Common Stock	680,000	200,000
Additional paid-in capital	4,200,000	250,000
Retained earnings	7,960,000	2,050,000
	$14,248,900	$3,348,000

1. Prepare the acquisition entry on the parents book.
2. Prepare the consolidation entries (E Equity and A Acquisition Accounting Premium.