Pagle Corporation established a subsidiary to enter into a new line of business considered to be substantially more risky than Pagle’s current business. Pagle transferred the following assets and accounts payable to Sand Corporation in exchange for 5,000 shares of $10 par value stock of Sand:

Required

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

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

Transcribed Image Text:

Cash Accounts Receivable Inventory Land Buildings & Equipment Cost $ 30,000 45,000 60,000 20,000 300,000 Book Value $ 30,000 40,000 60,000 20,000 260,000