On January 1, 2021, Pikes Corporation loaned Venti Company $311,000 and agreed to guarantee all of Venti’s long-term debt in exchange for (1) decision-making authority over all of Venti’s activities and (2) an annual management fee of 25 percent of Venti’s annual revenues. As a result of the agreement, Pikes becomes the primary beneficiary of Venti (now a variable interest entity). Pikes’ loan to Venti stipulated a 10 percent (market) rate of interest to be paid annually with principal due in 10 years. On January 1, 2021, Pikes estimated that the fair value of Venti’s equity shares equaled $86,000 while Venti’s book value was $66,000. Any excess fair over book value at that date was attributed to Venti’s trademark with an indefinite life.