Montreal Inc. and Ottawa Inc. decided to jointly form a company on January 1, 2017, named Kingston Inc. Kingston Inc. will manufacture a product that will be sold to customers. The parties agreed that all decisions regarding Kingston Inc. will be done unanimously and that Montreal Inc. will receive 45% interest in Kingston Inc. 

Montreal Inc. paid for its share of the investment by contributing machinery with a fair value of $300,000 and carrying value of $250,000 and had a useful life of 10 years and no residual value. This machinery became the property of Kingston Inc. 

For the year ended December 31, 2017, Kingston Inc. earned revenue of $180,000 and incurred expenses of $140,000.

 Required:

 Show the journal entries Montreal Inc. must record for the year ended December 31, 2017 relating to the information above

Answer rating: 100% (QA)

To record the journal entries for Montreal Inc for the year ended December 31 2017 we need to account for the contribution of machinery to Kingston In... View the full answer