P purchased 100% stock of S by issuing 25,000, $15 par value shares of its own. At that time, the market value of the shares of P's shares was $40. The balance in the retained earnings account of S was $65,000 and the common stock was $160.000. Hint: You don't need to use all the information given in the books of P, the journal entry for acquisition will include a Credit to Share Capital $1,000,000 Debit to Goodwill with $150,000 Debit to Investment account with $1,000,000 Credit to Share Premium $375,000 QUESTION 26 Refer to the problem above where P purchased 100% stock of S by issuing 25,000, S15 par value shares of its own. At that time, the market value of the shares of P's shares was $40. The balance in the retained earnings account of S was $65,000 and the common stock was $160,000. Hint: You don't need to use all the information given In the books of P the journal entry for acquisition will include a Credit to Share Capital $1,000,000 Debit to investment account with $375,000 Credit to share premium $625,000 Debit to Goodwill with $150,000