Phone Corporation acquired 70 percent of Smart Corporation's common stock on December 31, 20X4, for $96,600. At that date, the fair value of the noncontrolling interest was $41,400. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Phone Corporation $ 61,300 104,000 141,000 70,000 420,000 (160,000) 26,600 $ 732,900 $ 142,500 322,400 71,000 197,000 $ 732,900 Smart Corporation $ 26,000 63,000 77,000 47,000 266,000 (71,000) Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Smart Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity $408,000 $ 28,000 263,000 39,000 78,000 $408,000 At the date of the business combination, the book values of Smart's assets and liabilities approximated fair value except for inventory, which had a fair value of $83,000, and buildings and equipment, which had a fair value of $210,000. At December 31, 20X4, Phone reported accounts payable of $13,500 to Smart, which reported an equal amount in its accounts receivable. Required: a. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Entry Accounts Debit Credit 1 39,000 78,000 Common stock Retained earnings Investment in Smart Corporation NCI in NA of Smart Corporation 81,900 35,100 B 2 6,000 -15,000 X Inventory Buildings and equipment Investment in Smart Corporation NCI in NA of Smart Corporation 14,700 -23,700 X