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.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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
с
Event
1
2
3
X Answer is not complete.
General Journal
Investment in Seed Company stock
Additional paid-in capital
Additional paid-in capital
Deferred Stock Issue Costs
Investment in Seed Company stock
Investment in Seed Company stock
Goodwill
X
X
X
✓
X
››
✓
Debit
85,000 X
3,500 x
2,000✔
85,000✔
Credit
85,000
5,500 X
85,000
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 с Event 1 2 3 X Answer is not complete. General Journal Investment in Seed Company stock Additional paid-in capital Additional paid-in capital Deferred Stock Issue Costs Investment in Seed Company stock Investment in Seed Company stock Goodwill X X X ✓ X ›› ✓ Debit 85,000 X 3,500 x 2,000✔ 85,000✔ Credit 85,000 5,500 X 85,000
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