Journal entries for midyear investment (excess allocated to land, equipment, and goodwill)
Jack Corporation paid $380,000 for 40 percent of Jill Corporation’s outstanding voting common stock on July 1, 2011. Jill’s stockholders’ equity on January 1, 2011, was $500,000, consisting of $300,000 capital stock and $200,000 retained earnings. During 2011, Jill had net income of $100,000, and on November 1, 2011, Jill declared dividends of $50,000. Jill’s assets and liabilities were stated at fair values on July 1, 2011, except for land that was undervalued by $30,000 and equipment with a five year remaining useful life that was undervalued by $50,000.
REQUIRED: Prepare all the journal entries (other than closing entries) on the books of Jack Corporation during 2011 to account for the investment in Jill.