Reference no: EM132621976
Question - A Co acquired a controlling interest in B Co and entered into the following transactions on acquisition date 1 July 20x3
Cash payment to owners of B Co $4,000,000
Loan payable to banks to finance the acquisition $3,200,000
Fair value of shares issued to owners of B Co $5,000,000
Book value of shares issued to owners of B Co $4,000,000
Cost of Issuing equity $40,000
Deferred consideration, payable at the end of 5 years $8,000,000
Present value of deferred consideration at an interest of 5%pa $6,268,209
Required - Prepare the journal entries that A Co would record to reflect the above transactions on 1 July 20X3. Unamortized discount or premium, where applicable should be shown separately