Pab Corporation decided to establish Sollon Company as a wholly
owned subsidiary by transferring some of its existing assets and
liabilities to the new entity. In exchange, Sollon issued Pab
32,000 shares of $6 par value common stock. The following
information is provided on the assets and accounts payable
transferred:
Required:
a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| Cost | Book Value | Fair Value | |||||||
| Cash | $ | 44,000 | $ | 44,000 | $ | 44,000 | |||
| Inventory | 76,000 | 76,000 | 76,000 | ||||||
| Land | 79,000 | 79,000 | 109,000 | ||||||
| Buildings | 175,000 | 134,000 | 249,000 | ||||||
| Equipment | 90,000 | 76,000 | 121,000 | ||||||
| Accounts Payable | 63,000 | 63,000 | 63,000 | ||||||
Required:
a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
