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What the equity investment and the gain on revaluation

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Problem - Acquisitions Achieved in Stages (step acquisitions)

Assume that a parent company gains control over its subsidiary with the purchase of a 45% interest for $180,000. Prior to this transaction, the parent's Equity Investment account reports a balance of $112,000 on the acquisition date and represents a 35% interest in the subsidiary. The fair value of 100% of the subsidiary on the date the parent obtains control of the subsidiary is $400,000 (assume no premium for control). Prepare the journal entries to record the acquisition

Journal Entries

Equity Investment 180,000

Cash 180,000 (to Record Purchase)

Equity Investment ?

Gain on revaluation of subsidiary ?

(To record write-up.)

Required - What the equity investment and the gain on revaluation of subsidiary journal entry?

Reference no: EM132478713

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