Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $195,000. The trial balances for the two companies on December 31, 20X7, included the following amounts:

	Prince Corporation									Sword Company
Item	Debit				Credit					Debit				Credit
Cash		$	83,000								$	31,000
Accounts Receivable			67,000									72,000
Inventory			177,000									104,000
Land			81,000									26,000
Buildings and Equipment			491,000									159,000
Investment in Sword Company			255,000
Cost of Goods Sold			491,000									253,000
Depreciation Expense			21,000									11,000
Other Expenses			66,000									66,000
Dividends Declared			52,000									26,000
Accumulated Depreciation						$	143,000								$	55,000
Accounts Payable							64,000									30,000
Mortgages Payable							185,000									108,000
Common Stock							287,000									45,000
Retained Earnings							324,000									91,000
Sales							695,000									419,000
Income from Sword Company							86,000
		$	1,784,000			$	1,784,000				$	748,000			$	748,000

Additional Information

1. On January 1, 20X7, Sword reported net assets with a book value of $136,000. A total of $26,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7.
2. Swords depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment.
3. Prince used the equity-method in accounting for its investment in Sword.
4. Detailed analysis of receivables and payables showed that Sword owed Prince $25,000 on December 31, 20X7.

Required: a. Prepare all journal entries recorded by Prince with regard to its investment in Sword during 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare all consolidating entries needed to prepare a full set of consolidated financial statements for 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Prepare a three-part consolidation worksheet as of December 31, 20X7. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)