Smith, Inc., has the following stockholders equity accounts as of January 1, 2014:

Preferred stock$100 par, nonvoting and nonparticipating, 7 percent cumulative dividend	$	2,090,000
Common stock$20 par value		4,090,000
Retained earnings		10,090,000

Haried Company purchases all of Smiths common stock on January 1, 2014, for $14,240,000. The preferred stock remains in the hands of outside parties. Any excess acquisition-date fair value will be assigned to franchise contracts with a 30-year remaining life.

During 2014, Smith reports earning $540,000 in net income and declares $450,000 in cash dividends. Haried applies the equity method to this investment.

c.	What consolidation entries are needed for 2014? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. prepare entry S and A(combined) 2. prepare entry I 3. prepare entry D 4. prepare entry E