Question
On September 1, 2021, the Company anticipates it will emit 4.1 million metric tons of CO2 during the 2021 year. On the same day, CPMs
On September 1, 2021, the Company anticipates it will emit 4.1 million metric tons of CO2 during the 2021 year. On the same day, CPMs pertaining to the 2021 vintage are trading on the open market for $1,000 per CPM. Competitor MDGreen projects that it will have a surplus of CPMs because of the success of a new low-emission hydroelectric plant activated in 2021. On September 1, 2021, MDGreen agrees to sell 100,000 CPMs to the Company for $100 million. This transaction is recorded on the blockchain, and the Company now holds 4.1 million CPMs for the 2021 year.
How should the Company account for its purchase of 100,000 CPMs from MDGreen on September 1, 2021 under U.S. GAAP Standards?
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Journal Entry for Purchase of 100000 CPMs f...
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
13th Edition
9780470374948, 470423684, 470374942, 978-0470423684
