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Prepare the journal entries that a co would record

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Reference no: EM132621976

Question - A Co acquired a controlling interest in B Co and entered into the following transactions on acquisition date 1 July 20x3

Cash payment to owners of B Co $4,000,000

Loan payable to banks to finance the acquisition $3,200,000

Fair value of shares issued to owners of B Co $5,000,000

Book value of shares issued to owners of B Co $4,000,000

Cost of Issuing equity $40,000

Deferred consideration, payable at the end of 5 years $8,000,000

Present value of deferred consideration at an interest of 5%pa $6,268,209

Required - Prepare the journal entries that A Co would record to reflect the above transactions on 1 July 20X3. Unamortized discount or premium, where applicable should be shown separately

Reference no: EM132621976

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