Question
Frosty Ltd. exchanged 400 common shares of Grants Corp., which Frosty was holding as an investment, for new equipment from Milliken Sales. The Grants Corp.
Frosty Ltd. exchanged 400 common shares of Grants Corp., which Frosty was holding as an investment, for new equipment from Milliken Sales. The Grants Corp. common shares, which had been purchased by Frosty for $80 per share, had a quoted market value of $100 per share at the date of exchange. The equipment had a recorded amount on Millikens books of $37,000, but the fair value was not available. The journal entry that Frosty should make to record this exchange is
| Equipment | 37,000 | ||
| Loss on Disposal of Investment | 3,000 | ||
| Investment in Grants Corp. Common Shares | 40,000 |
| Equipment | 37,000 | ||
| Investment in Grants Corp. Common Shares | 32,000 | ||
| Gain on Disposal of Investment | 5,000 |
| Equipment | 32,000 | ||
| Investment in Grants Corp Common Shares | 32,000 |
| Equipment | 40,000 | ||
| Investment in Grants Corp. Common Shares | 32,000 | ||
| Gain on Disposal of Investment | 8,000 |
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Accounting for Governmental and Nonprofit Entities
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
16th Edition
78110939, 978-0078110931
