How would the transaction in BE23-11 be recorded if the individual shareholder only owned 40% of the shares of each company? Assume that there is independent evidence to support the value of the computer software.
In BE Textile manufacturer Peterson Corp. exchanges computer software having a carrying amount of $11,000 with the real estate company Frederick Corp. The software that is received in exchange from Frederick Corp. has a carrying amount of $15,100, performs different functions, and has a fair value of $20,800. Both companies are 100% owned by the same individual and since they are closely held companies they both follow
Discuss and prepare journal entries. Use the decision tree in Illustration 23-5 to explain the reasoning for your answer.

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