Peak Entertainment acquires all of the stock of Saddlestone Inc. on January 1, 2020. In preparing to consolidate the trial balances of Peak and Saddlestone at December 31, 2021 (two years after the acquisition), you assemble the following information:

Date-of-acquisition information:

Value of stock given up to acquire Saddlestone: $20,000,000.

Direct merger costs: $250,000.

Saddlestones shareholders equity: $7,200,000, consisting of capital stock, $2,000,000; retained earnings, $5,000,000; accumulated other comprehensive income, $200,000.

Fair value of earnings contingency agreement to be paid in cash: $300,000.

Fair value of previously unrecorded identifiable intangibles (5-year life): $2,000,000. There are no revaluations of Saddlestones reported net assets.

Information for 2020 and 2021:

Saddlestones reported net income for 2020: $3,000,000; for 2021: $3,500,000.

Saddlestones reported other comprehensive income for 2020: $100,000 net income; for 2021: $25,000 net loss.

Saddlestone declared and paid dividends of $1,000,000 each year.

Goodwill and identifiable intangibles are not impaired in 2020; goodwill is impaired by $200,000 in 2021.

Required

a. Prepare the 2020 and 2021 journal entries made by Peak to record its investment, using the complete equity method.

Enter numerical answers using all zeros (do not abbreviate in thousands or in millions).

need answers to wrong ones show work if possible.

>> 1 Using the complete equity method Enter numerical answers using all zeros (do not abbreviate in thousands or in millions) Description Debit Credit Investment in Saddlestone 20,300,000 07 Merger expenses 250,000 07 Contingent consideration llability 0 300,000 Capital stock 0 20,000,000 Cash O 250,000 To record acquistion of Saddlestone. Investment in Saddlestone 5,800,000 07 Equity in net income of Saddlestone 0 3,100,000 x Equity in OCH(L) of Saddlestone 2,700,000 X To record equity in net income and OCK) for 2020. Cash 1,000,000 Investment in Saddlestone O 1,000,000 To record receipt of dividends for 2020. Investment in Saddlestone 9.500.000 0 Equity in OCKL) of Saddlestone 10 X O Equity In net income of Saddlestone OX To record equity in net income and OC TOC 2023 Cash 1.000.000 Investment in Saddlestone 0 1.000.000 To record receipt of dividends for 2021 0 10 30 0 10 x b. Prepare the consolidation eliminating entries made at December 31, 2021 Enter numerical answers using all zeros (do not abbreviate in thousands or in millions). Rel. Description Debit Credit Equity in net income of Saddlestone 3,500,000 0 Equity in OCHL) of Saddlestone 25.000 0X Dividends-Saddlestone 1,000,000 Investment in Saddlestone 25.000 x (5) Capital stock 10 X Retained earnings 10 X Accumulated OCI 10 X 10 X Investment in Saddlestone 10 X (R) Identifiable intangibles 10 X 10 X Goodwill 10X Investment in Saddlestone 10 X 10 x (O) Amortization expense 10 X 10 Goodwill impairment loss 10 X Indentifiable intangibles 10 X Goodwill 10 x 10 TOX 10X 10 10 * 10 X