Question
On January 1, 2018, Post Company acquired an 80% ownership in Stake Company. The fair value of Stake Companys net assets was the same as
On January 1, 2018, Post Company acquired an 80% ownership in Stake Company. The fair value of Stake Companys net assets was the same as book value except for the following: The fixed assets of Stake Company, whose remaining life was 20 years, had a fair value in excess of the book value of $100,000. Which is true regarding the consolidation journal entry for the undervalued fixed assets on December 31, 2018?
Select one:
a. Debit depreciation expense for $5,000.
b. Debit accumulated depreciation for $5,000.
c. Debit fixed assets for $5,000.
d. Credit fixed assets for $100,000.
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