Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. jack acquires 24 million 1 shares (80%) of the ord

Jack acquires 24 million 1 shares (80%) of the ordinary shares of Becky by offering...

60.1K

Verified Solution

Question

Accounting

Jack acquires 24 million 1 shares (80%) of the ordinary shares of Becky by offering a share forshare exchange of two shares for every three shares acquired in Becky and a cash payment of 1 per share payable three years later. Jack's shares have a nominal value of 1 and a current market value of 2. The cost of capital is 10% and 1 receivable in 3 years can be taken as 0.75.

Required

(i) Calculate the cost of investment and show the journals to record it in Jack's accounts.

(ii) Show how the discount would be unwound.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Explain the reasons for bond ratings and how prices of bonds may be affected. Are bonds...

Finance
Q

Find the percent ionization of a 0.100 M solution of a weak monoprotic acid having Ka=...

Chemistry
Q

Define the following by text and drawing figures. (a) Median diameter (b) Bimodal sediment

Civil Engineering
Q

Suppose it was possible to use genetic engineering to make people more intelligent Do you...

Biology
Q

1 In the above arrangement the ring can slide on the frictionless circular wire frame...

Physics
Q

Graph I Graph II Graph III Click here for long description Graph IV

Calculus
Q

FIFO and LIFO costs under perpetual inventory system The following units of an item were...

Accounting
Q

Question \#2. (2 points) Your neighbor is the pastor for The Happy Place Church, which...

Accounting
Q

Joe Penner, preside of Penner Corporation, is considering the issuance of bonds to finance an...

Accounting
Q

Bellingham Company produced 2,000 units of product that required 7 standard hours per unit. The...

Accounting
Q

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South...

Finance
Q

Need help with the general journal. 1. Complete...

Accounting