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How does this transaction affect the Investment in Odom Inc

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Question - Parker owned all of Odom Inc. Although the Investment in Odom Inc. account had a balance of $834,000, the subsidiary's 12,000 shares had an underlying book value of only $56 per share. On January 1, 2018, Odom issued 3,000 new shares to the public for $70 per share. How does this transaction affect the Investment in Odom Inc. account?

a. It should be decreased by $210,000.

b. It should be increased by $210,000.

c. It should be increased by $168,000.

d. It should be increased by $1,200.

e. It is not affected since the shares were sold to outside parties.

Reference no: EM132601389

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