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 Additional paid-in capital Cash Deferred Stock Issue Costs Additional paid-in capital Answer is not complete. General Journal Investment in Seed Company stock Additional paid-in capital Common stock *33 100 000 Debit 3.500 2,000 85,000 Credit 3.500 45.000 X 2,000 10.000 X 40.000
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 Additional paid-in capital Cash Deferred Stock Issue Costs Additional paid-in capital Answer is not complete. General Journal Investment in Seed Company stock Additional paid-in capital Common stock *33 100 000 Debit 3.500 2,000 85,000 Credit 3.500 45.000 X 2,000 10.000 X 40.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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
Additional paid-in capital
Cash
Deferred Stock Issue Costs
Additional paid-in capital
Answer is not complete.
General Journal
Investment in Seed Company stock
Additional paid-in capital
Common stock
X33
>>*
333
Debit
3,500
2,000
85,000
>
Credit
3.500
45.000 X
2,000
>
10,000 X
40.000
K
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education