Question: B Company Ltd, a reporting entity, purchases all the issued shares of C Company Pty Ltd for $600,000. The net assets of C Company Pty

B Company Ltd, a reporting entity, purchases all the issued shares of C Company Pty Ltd for $600,000. The net assets of C Company Pty Ltd at the date of acquisition consist of equipment $800,000 and a loan of $200,000 with these values representing their respective fair values.

B Company Ltd will record the acquisition in its separate accounting records as follows:

	a.	Dr. Investment in C Company Pty Ltd $600,000 Cr. Issued Capital $600,000
	b.	Dr. Investment in C Company Pty Ltd $600,000 Cr. Cash $600,000
	c.	Dr. Equipment $800,000 Cr. Loan $200,000 Cr. Cash $600,000
	d.	Dr. Investment in B Company Pty Ltd $600,000 Cr. Cash $600,000
	e.	Dr. Equipment $800,000 Cr. Loan $200,000 Cr. Issued Capital $600,000

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