Prime Company holds 80 percent of Suspect Companys stock, acquired on January 1, 20X2, for $182,000. On the acquisition date, the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect.

Trial balance data for the two companies on December 31, 20X6, are as follows:

Item	Prime Company		Suspect Company
	Debit	Credit	Debit	Credit
Cash and Accounts Receivable	$ 112,000		$ 37,000
Inventory	274,000		98,000
Land	90,000		65,000
Buildings and Equipment	540,000		150,000
Investment in Suspect Company	213,270
Cost of Goods Sold	133,400		78,200
Depreciation and Amortization Expense	27,000		15,000
Other Expenses	15,000		6,000
Dividends Declared	30,000		5,000
Accumulated Depreciation		$ 221,400		$ 45,000
Accounts Payable		63,000		18,000
Bonds Payable		150,000		50,000
Common Stock		300,000		100,000
Retained Earnings		428,460		71,200
Sales		230,000		170,000
Gain on Sale of Equipment		15,500
Income from Suspect Company		26,310
Total	$ 1,434,670	$ 1,434,670	$ 454,200	$ 454,200

Additional Information

At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31, 20X6, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20,475 should be recognized in 20X6 and shared proportionately between the controlling and noncontrolling shareholders.

On January 1, 20X5, Suspect sold land that had cost $8,000 to Prime for $18,000.

On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $75,000 on January 1, 20X1. The equipment has a total economic life of 15 years and was sold to Suspect for $65,500. Both companies use straight-line depreciation.

There was $7,500 of intercompany receivables and payables on December 31, 20X6.

Record the basic consolidation entry

Record the amortized excess value reclassification entry

Record the excess value (differential) reclassification entry

Record the entry to eliminate the gain on the equipment and to correct the asset's basis

Record the entry to adjust accumulated depreciation