On February 1, 2019, Silicon Rentals contracts with Zurgg Technology to provide 6 months of office services
Question:
On February 1, 2019, Silicon Rentals contracts with Zurgg Technology to provide 6 months of office services in exchange for 18,000 shares of Zurgg’s common stock. The contract is signed on that date and works starts immediately. Silicon appropriately determines that its performance obligation is satisfied over time and each month it receives 3,000 shares of Zurgg Technology common stock. The fair value of Zurgg’s common stock at February 28, 2019, and March 31, 2019, is $40 and $31, respectively.
Required:
1. Prepare Silicon’s journal entries related to recognize service revenue for February and March.
2. Assume that Silicon could not estimate the fair value of Zurrgg’s common stock. How would Silicon determine fair value?
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
1 2019 Feb28 AvailableforSaleInvestment 120000 Service Revenue 120000a a 300...View the full answer
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
