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Acquisitions achieved in stages (step acquisitions) Assume that a parent company gains control over...

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Accounting

Acquisitions achieved in stages (step acquisitions)

Assume that a parent company gains control over its subsidiary with the purchase of a 45% interest for $270,000. Prior to this transaction, the parents Equity Investment account reports a balance of $168,000 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 $600,000 (assume no premium for control). Prepare the journal entries to record the acquisition.

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Description Debit Credit 0 0 0 0 To record purchase. 0 0 0 0 To record write-up

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