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On January 1, 2021, Consolidated Company purchased 100% of the common stock Avergy Industries for...

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Accounting

On January 1, 2021, Consolidated Company purchased 100% of the common stock Avergy Industries for $720,000. On that date, Avergy had common stock of $100,000 and retained earnings of $420,000. Equipment and land were each undervalued by $50,000 on Avergy's books. There was a $40,000 overvaluation of Bonds Payable, as well a $60,000 undervaluation of inventory. The combined consolidation entries necessary for a date of acquisition balance sheet include all of the following, except:

A. Equity investment credit 720,000

B. Retained earnings credit 420,000

C. No debits or credits to goodwill

D. Common stock debit 100,000

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