Assume that a parent company increases its ownership in a subsidiary

Assume that a parent company increases its ownership in a subsidiary from 55% to 75% through the purchase of additional shares of the subsidiary’s outstanding stock from noncontrolling shareholders for a purchase price of $165,000. Prior to this transaction, the noncontrolling interest reports a balance of $1,350,000 on that date. Prepare the journal entry by the parent to record the purchase. Description

Debit Credit

Answer Equity investment x x

APIC x x

Cash x x


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