On January 1, 2017, the Z Corporation acquired a 20% interest in D Company by purchasing...

 

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On January 1, 2017, the Z Corporation acquired a 20% interest in D Company by purchasing 4,800 shares of its 24,000 outstanding shares of common stock. The acquisition price was $32 per share. On the date of purchase, D Company's net assets were as follows: Book Value Fair Value Difference 60,000 $ 74,000 $ 14,000 $160,000 $ 196,000 $ 36,000 $220,000 $ 270,000 $ 50,000 Nondepreciable assets Depreciable assets Total assets Total liabilities 80,000 $ 80,000 $ During 2017, D Company earned income of $90,000 and paid dividends of $20,000. The depreciable assets have a ten-year remaining life and no residual value. Required: Prepare all of the journal entries on Z Corporation's books to record the acquisition and subsequent events in 2017 related to the investment in D Company. On January 1, 2017, the Z Corporation acquired a 20% interest in D Company by purchasing 4,800 shares of its 24,000 outstanding shares of common stock. The acquisition price was $32 per share. On the date of purchase, D Company's net assets were as follows: Book Value Fair Value Difference 60,000 $ 74,000 $ 14,000 $160,000 $ 196,000 $ 36,000 $220,000 $ 270,000 $ 50,000 Nondepreciable assets Depreciable assets Total assets Total liabilities 80,000 $ 80,000 $ During 2017, D Company earned income of $90,000 and paid dividends of $20,000. The depreciable assets have a ten-year remaining life and no residual value. Required: Prepare all of the journal entries on Z Corporation's books to record the acquisition and subsequent events in 2017 related to the investment in D Company.