Investor Co. purchased 25% of the shares of Investee Co. for cash at their book value. At
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Investor Co. purchased 25% of the shares of Investee Co. for cash at their book value. At that time, Investee reported common shares of $120,000 and retained earnings of $150,000, and all of Investee's assets and liabilities had fair values equal to their book values. Which of the following is the appropriate journal entry to record this transaction? Assume Investor reports under ASPE.
A. DR Investment in Investee 37,500 CR Cash 37,500
B. DR Investment in Investee 30,000 CR Cash 30,000
C. DR Cash 67,500 CR Investment in Investee 67,500
D. DR Investment in Investee 67,500 CR Cash 67,500
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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