On January 1, 2021, Sub sold a parcel of land to Parent for future development. Parent paid Sub $300 for this land. The land was carried on sub’s balance sheet at $175. Sub has owned the land for 5 years.

1. Prepare Parent’s journal entry to record the purchase of land from sub in 2021.
2.  
3. Prepare Sub’s journal entry to record the sale of land to Parent in 2021.

 

1. Compute the amortization of the gain on the sale of Land on January 1, 2021.

 

Date Account Debit Credit