Assume that a parent company gains control over its subsidiary with the purchase of a 45% interest for $450,000. Prior to this transaction, the parents Equity Investment account reports a balance of $280,000 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 $1,000,000 (assume no premium for control). what is the interest expense?

Acquisitions achieved in stages (step acquisitions) Assume that a parent company gains control over its subsidiary with the purchase of a 45% interest for $450,000. Prior to this transaction, the parent's Equity Investment account reports a balance of $280,000 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 Debit Credit To record purchase. To record write-up