Part b.

Peer Company acquired 75% of the common stock of Sight Company January 1, year one, for $450,000 The consideration given was proportional to Sight' fair value. On that date, Sight had the following trial balance: \begin{tabular}{|l|r|r|} \hline account & debit & \multicolumn{1}{c|}{ credit } \\ \hline Additional paid in capital & & $100,000 \\ \hline Building (12-year life) & $250,000 & \\ \hline Common stock & & 170,000 \\ \hline Current assets & 170,000 & \\ \hline Equipment (6-yr life) & 160,000 & \\ \hline Land & 110,000 & \\ \hline Liabilities (due in 4 years) & & 300,000 \\ \hline Retained earnings 1/year 1 & & 120,000 \\ \hline & & \\ \hline Totals & $690,000 & $690,000 \\ \hline \end{tabular} During year one, Sight reported net income of During year one, Sight paid dividends of During year two, Sight reported net income of During year two, Sight paid dividends of $80,000 On January 1, year one, fair values of certain Sight's accounts were: LandBuildingEquipment$122,000$265,000$172,000 There was no impairment of any goodwill arising from the acquisition. Please use Equity method for Peer to account for its acquisition of Sight Company. Part b. Use the data for the Peer Company acquisition of the Sight Company to prepare the consolidation entries (Journal Entries) for December 31 of year two