QUESTION $4$

P Corporation acquired a $90\%$ interest in $S$ Company for $$6,500,000$ on January $1,2020.$ At that time $S$ Company had common stock of $$4,500,000$ and retained earnings of $$1,800,000.$ The balance sheet information available for $S$ Company on January $1,2020,$ showed the following:

The equipment had a remaining useful life of ten years. S Company reported $$240,000$ of net income in $2020$ and declared $$60,000$ of dividends during the year.

Required:

Prepare the work paper entries assuming the cost method is used to eliminate dividends, eliminate the investment account, and allocate and depreciate the difference between implied and book value for $2020.$