Peppard acquires 90% of the voting stock of Schultz on January 1, 2020 for $5,000. The fair value of the noncontrolling interest is $550. Schultzs equity is reported at $4,800 at the date of acquisition. Its net assets are reported at amounts approximating fair value, but it has previously unreported identifiable intangible assets (5-year life, straight-line), valued at $1,000. Peppard uses the complete equity method to account for its investment. Schultz reports net income of $300 for 2020.

REQUIRED:

What is meant by non-controlling interest? What journal entry does Peppard record on its books for its investment in Schultz?