Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 30,000 shares of $6 par value common stock. The following information is provided on the assets and accounts payable transferred:

Required

a. Give the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon.

b. Give the journal entry that Sollon recorded for the receipt of assets and accounts payable from Pab.

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Cash Inventory Land Buildings Equipment Accounts Payable Cost $ 25,000 70,000 50.000 170,000 90,000 45,000 Book Value $ 25,000 70,000 60,000 130,000 80,000 45,000 Fair Value $ 25,000 70,000 90,000 240,000 105,000 45,000