YumCake Ltd purchased 75% of the shares in Berries Ltd on 1 July 2019.

YumCake settled the purchase consideration for Berries Ltd as follows:

1.Issued 5,000 shares with a nominal value of $1. The share price of YumCake

Ltd's shares at 1 July 2019 was $31.25 per share. Share issue expenses of

$3,125 were paid;

2.Additional payments of 25% of any profits that exceed $600,000 for the years

ending 31 December 2019 and 2020.

Estimated profits:

31 December 2019 $725,000

31 December 2020 $850,000

Actual profits:

31 December 2019 $725,000

31 December 2020 $870,000

The present value of the above estimated additional payments calculated at a

discount factor of 11% are $29,661 in respect of year end 31 December 2019

and $53,444 in respect of the year end 31 December 2020 - a total present value

of $83,105 at 1 July 2019.

I feel confused about how to prepare the journal entries that YumCake Ltd would record in its financial statements