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How to record and report this investment

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Question - X COMPANY produces organic food. The Company is owned by John of Trent company, where the business has been very successful over the last 10 years.

This year the company ran into financial difficulties and, to avoid bankruptcy, John asked his friend of several years, Timothy Smith who owns a majority shareholding in Muskoka Lighting Company (MLC), a public Company, to assist him by providing additional financing. MLC advanced $1,000,000 to BU for a one-third interest in BU.

The accountant at MLC is considering how to record and report this investment.

Reference no: EM133010210

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