Question: On January 1, 2014, Chesapeake Corporation issued common stock with a fair value of $810,000 in exchange for 90% of Deardon Corporation's common stock. Following are the January 1, 2014, separate balance sheets of Chesapeake and Deardon immediately following the acquisition, plus fair value information for Deardon's assets and liabilities:
Required: 1. Provide the adjustments and elimination entries needed to prepare the post-acquisition January 1, 2014, consolidated balance sheet under the acquisition method.
2. Prepare the January 1, 2014, consolidated balance sheet.