On January 1,20X7,Infinity Corporation Acquired 90 Percent of Trader Corporation's

On January 1,20X7,Infinity Corporation acquired 90 percent of Trader Corporation's common stock for $315,000.At the date of acquisition,the fair value of the noncontrolling interest was $35,000,and Trader reported common stock outstanding of $150,000 and retained earnings of $180,000.The differential is assigned to a patent with a remaining life of eight years.Each year since acquisition,Trader has reported income from operations of $50,000 and paid dividends of $30,000.
Trader acquired 75 percent ownership of Minnow Company on January 1,20X9,for $187,500.At that date,the fair value of the noncontrolling interest was $62,500,and Minnow reported common stock outstanding of $100,000 and retained earnings of $130,000.In 20X9,Minnow reported net income of $20,000 and paid dividends of $8,000.The differential is assigned to buildings and equipment with an economic life of 10 years at the date of acquisition.
Required:
1)Prepare the journal entries recorded by Trader for its investment in Minnow during 20X9.
2)Prepare the journal entries recorded by Infinity for its investment in Trader during 20X9.
3)Prepare the consolidating entries related to Trader's investment in Minnow and Infinity's investment in Trader needed to prepare consolidated financial statements for Infinity and its subsidiaries at December 31,20X9.
Problem 59 (continued):