Reference no: EM132732899
Question - At December 31, 2018, Pine Co. owned 80% of the common stock of Sandy Co. At that date, Sandy' stockholders' equity accounts had the following balances:
Common Stock ($5 par) $250,000
Additional paid-in capital 110,000
Retained Earnings 330 000
Total stockholders' equity $690,000
The balance in Pine's account, Investment in Sandys, was $552,000 (80% of $690,000).
On January 1, 2019, Sandys sold 10,000 shares of previously unissued common stock for $15 per share. Pine did not purchase any of these newly-issued shares.
Required - Prepare the journal entry that Pine must make to recognize the impact of this transaction.