Proud Corporation acquired 80 percent of Spirited Companys voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $44,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Proud Corporation Spirited Company Item Debit Credit Debit Credit Current Assets $ 248,000 $ 158,000 Depreciable Assets 500,000 308,000 Investment in Spirited Company 133,760 Depreciation Expense 21,000 11,000 Other Expenses 142,000 82,000 Dividends Declared 50,000 27,800 Accumulated Depreciation $ 195,000 $ 66,000 Current Liabilities 66,000 46,000 Long-Term Debt 113,960 186,800 Common Stock 182,000 87,000 Retained Earnings 266,000 57,000 Sales 231,000 144,000 Income from Spirited Company 40,800 $ 1,094,760 $ 1,094,760 $ 586,800 $ 586,800

Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the basic consolidation entry.

Event	Accounts	Debit	Credit
1	Common stock
	Retained earnings

Record the optional accumulated depreciation consolidation entry.

Event	Accounts	Debit	Credit
2