Sloane, Inc., issues 25,000 shares of its own common stock in exchange for all outstanding shares of Benjamin Co. Benjamin will remain a separate corporation. How does Sloane record the issuance of these shares?
belongs to book: ADVANCED ACCOUNTING|Debra C.jeter, Paul K.Chaney|7th edition| Chapter number:2| Question number:9
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Accounting
Shares issued are recorded at fair value as if the stock had been sold and the money obtained used to acquire the subsidiary.
need an explanation for this answer? contact us directly to get an explanation for this answerThe Common Stock account is recorded at the par value of these shares with any excess amount attributed to additional paid-in capital.