Three companies, Acres Ltd (AL), Barrus Ltd (BL), and Caron Ltd (CL), each dealing at arm's length, are forming a joint venture named Collusive Ventures Ltd (CVL). In this venture, they hold equity interests of 25% for AL, 35% for BL, and 40% for CL. For the joint venture, BL contributes miscellaneous assets worth $1,050,000, and CL contributes $400,000 in cash plus other assets valued at $800,000.You will concerned with accounting for the capital contribution being made by AL-only. The scenarios presented below involve different capital contributions by AL for its 25% stake in CVL, each with unique asset values and conditions related to liabilities and cash receipts. Scenario One: in return for its 25% equity interest in CVL, AL contributed Plant and equipment with a fair value of $1,100,000 and a carrying amount on AL's book of $600,000. In addition to its 25% equity interest, AL receives $350,000 in cash. CVL does not assume any liabilities at the time of incorporation. (Assuming that the transactions did not have commercial substance when AL transferred the non-monetary assets to CVL). prepare journal entries to record initial investment by Al

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Scenario One Journal Entries for ALs Initial Investment in CVL Assumptions Commercial substanc... View the full answer