Acquisitions achieved in stages (step acquisitions)

Assume that a parent company gains control over its subsidiary with the purchase of a 45% interest for $270,000. Prior to this transaction, the parents Equity Investment account reports a balance of $168,000 on the acquisition date and represents a 35% interest in the subsidiary. The fair value of 100% of the subsidiary on the date the parent obtains control of the subsidiary is $600,000 (assume no premium for control). Prepare the journal entries to record the acquisition.

Description Debit Credit 0 0 0 0 To record purchase. 0 0 0 0 To record write-up