On December 31, Year 4, Rent Company exchanged 25,000 shares of its $10 par value stock...

 

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On December 31, Year 4, Rent Company exchanged 25,000 shares of its $10 par value stock for all of the outstanding shares of Subic Company. The fair value of Rent's stock was $40 at the date of acquisition. The December 31, Year 4, balance sheet items of the Subic Company are presented in the opposite column on both a historical cost and a fair value basis. Historical Fair Cost Value Current assets $250,000 $300,000 Fixed assets 350,000 500,000 Liabilities 100,000 100,000 Common stock, $10 par 300,000 Retained earnings 200,000 Question Which entry in its separate financial statements records Rent's investment in its new subsidiary? On December 31, Year 4, Rent Company exchanged 25,000 shares of its $10 par value stock for all of the outstanding shares of Subic Company. The fair value of Rent's stock was $40 at the date of acquisition. The December 31, Year 4, balance sheet items of the Subic Company are presented in the opposite column on both a historical cost and a fair value basis. Historical Fair Cost Value Current assets $250,000 $300,000 Fixed assets 350,000 500,000 Liabilities 100,000 100,000 Common stock, $10 par 300,000 Retained earnings 200,000 Question Which entry in its separate financial statements records Rent's investment in its new subsidiary?

Answer rating: 100% (QA)

The entry to record Rent Companys investment in its new subsidiary Subic Company in ... View the full answer