Reference no: EM132588540

Question - Parker, Inc., acquired 10 percent of Simon Corporation on January 1, 2019, for $462,000 although Simon's book value on that date was $3,740,000. Simon held land that was undervalued by $220,000 on its accounting records. During 2019, Simon earned a net income of $528,000 while paying cash dividends of $198,000. On January 1, 2020, Parker purchased an additional 30 percent of Simon for $1,320,000. Simon's land is still undervalued on that date, but then by $264,000. Any additional excess cost was attributable to a trademark with a 10-year life for the first purchase and a 9-year life for the second. The initial 10 percent investment had been maintained at cost because fair values were not readily available. The equity method will now be applied. During 2020, Simon reported income of $660,000 and distributed dividends of $242,000.

Required - Prepare the journal entries for Parker, Inc.?