company-a-purchases-30000-shares-of-company-bs-100000-outstanding-shares-at-20-p

Question

Company A purchases 30,000 shares of Company B's 100,000 outstanding shares at $20 per share. What is the initial investment cost and the journal entry?

Accepted Answer

Initial investment cost is $$600,000; Debit Investment in Company B 600$$,000, Credit Cash $600,000.

Answer

Initial investment cost is $$300,000; Debit Investment in Company B 300$$,000, Credit Cash $300,000.

Answer

Initial investment cost is $$600,000; Debit Cash 600$$,000, Credit Investment in Company B $600,000.

Answer

Initial investment cost is $$300,000; Debit Cash 300$$,000, Credit Investment in Company B $300,000.

Company A purchases 30,000 shares of Company B's 100,000 outstanding shares at \$20 per share. What is the initial investment cost and the journal entry?