On January 1, 2011, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor's shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company's financial records by $30,000. This patent had a 5-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns income and pays cash dividends as follows:
2009 $ 75,000 $ 39,000
2010 96,000 44,000
2011 110,000 60,000
On December 31, 2011, Telconnect owes $22,000 to Bandmor
Required:
(a) If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2011?