Two entities, Peter and Paul, invest in a new company, POPP, to manufacture vintage records. Peter has experience in manufacturing records and has developed technology to improve the sound as well as the rights to many recording artists who are interested in preserving this nostalgic form of recording. Paul is a venture capital company that has financed other ideas that Peter has had in the past.
Peter will contribute the technology and know-how to the new company while Paul will contribute the financing. Peter will own 45% of POPP and Paul will own 55%. Each company will appoint directors in proportion to their ownership percentage. The managing director and the director of finance will be appointed by Peter.
Required
How will Peter record its investment in POPP?