What is the entry to record the expiration of stock rights

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Question - Esmeralda Company invested in 60,000 shares of another entity for a total cost of P5,500,000 on January 1 of the current year.

During the current year, the entity received 60,000 right to purchase one share at P80. Five rights are required to purchase one share.

At issue date, rights had a market value of P5 each.

The entity used the rights to purchase 10,000 additional shares of the investee and allowed the rights not exercised to lapse.

A. What amount was debited to stock rights account to record receipt of stock rights?

B. What is the entry to record the purchase of additional shares using stock rights?

C. What is the entry to record the expiration of stock rights?

Reference no: EM132911292

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