A parent acquires all of the voting stock of a subsidiary. The acquisition cost of $8 million is $1 million less than the fair value of the subsidiary's identifiable net assets, and $0.8 million less than the subsidiary's book value.
Which statement below is true concerning the consolidation working paper eliminating entries at the date of acquisition?

Question

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The subsidiary book value is $8.8 million, and the gain on acquisition is $1 million. The investment is valued at $9 million, the fair value of the subsidiary's identifiable net assets, on the parent's books. Eliminating entries at the date of acquisition are:
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A Parent Acquires All of the Voting Stock of a Subsidiary