eal Corporation issued 4,000 shares of its $10 par value stock with a market value of $85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed’s fair value was determined to be $100,000 on that date. Peal had previously purchased 15 percent of Seed’s common stock for $9,000 on January 31, 20X1, and had carried this investment at fair value on its balance. Peal reported this investment at $15,000 on its balance sheet at August 31, 20X3, immediately prior to acquiring the remaining 85 percent of Seed's shares. On August 31, 20X3, Peal also paid appraisal fees of $3,500 and stock issue costs of $2,000 incurred in completing the acquisition of the additional shares. Required: Prepare the journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

eal Corporation issued 4,000 shares of its $10 par value stock with a market value of $85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed’s fair value was determined to be $100,000 on that date. Peal had previously purchased 15 percent of Seed’s common stock for $9,000 on January 31, 20X1, and had carried this investment at fair value on its balance. Peal reported this investment at $15,000 on its balance sheet at August 31, 20X3, immediately prior to acquiring the remaining 85 percent of Seed's shares. On August 31, 20X3, Peal also paid appraisal fees of $3,500 and stock issue costs of $2,000 incurred in completing the acquisition of the additional shares. Required: Prepare the journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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Prepare the journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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Peal Corporation issued 4,000 shares of its $10 par value stock with a market value of $85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed's fair value was determined to be $100,000 on that date. Peal had previously purchased 15 percent of Seed's common stock for $9,000 on January 31, 20X1, and had carried this investment at fair value on its balance. Peal reported this investment at $15,000 on its balance sheet at August 31, 20X3, immediately prior to acquiring the remaining 85 percent of Seed's shares. On August 31, 20X3, Peal also paid appraisal fees of $3,500 and stock issue costs of $2,000 incurred in completing the acquisition of the additional shares. Required: Prepare the journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No A B C Event 1 2 3 Answer is not complete.…
Peal Corporation Issued 4,000 shares of Its $10 par value stock with a market value of $85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed's fair value was determined to be $100,000 on that date. Peal had previously purchased 15 percent of Seed's common stock for $9,000 on January 31, 20X1, and had carried this Investment at fair value on Its balance. Peal reported this Investment at $15,000 on Its balance sheet at August 31, 20X3, Immediately prior to acquiring the remaining 85 percent of Seed's shares. On August 31, 20X3, Peal also paid appraisal fees of $3,500 and stock Issue costs of $2,000 Incurred in completing the acquisition of the additional shares. Required: Prepare the Journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed. Note: If no entry is required for a transaction/event, select "No Journal entry required" In the first account field. No A B C Event 1 2 3 Acquisition Expense Cash…
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