Suppose Clair Company acquires some equipment from Marseilles Company in exchange for issuance of 10,000 shares of Clair’s common stock. The equipment was carried on Marseilles’s books at the €530,000 original cost less accumulated depreciation of €100,000. Clair’s stock actively trades and has a current market value is €55 per share. Its par value is €1 per share.

1. By using the balance sheet equation, show the effects of the transaction on the accounts of Clair Company and Marseilles Company.
2. Show the journal entries on the books of Clair Company and Marseilles Company.

  • CreatedFebruary 20, 2015
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