Question 1 (50 points). Planet Company was established on January 1, 2018. Along with other assets, it immediately purchased land for $200,000, and a building $150,000. On January 1, 2021, Planet transferred these assets, cash of $30,000, and inventory costing $75,000 to a newly created subsidiary, Saturn Company, in exchange for 120,000 shares of Saturns $2 par value stock. Planet uses straight line depreciation and useful life of 20 years for the building, with no estimated residual values.

Required: a. Give the journal entry that Planet recorded for the transfer of assets and liabilities to Saturn (25 points). b.

Give the journal entry that Saturn recorded for the receipt of assets and liabilities from Planet (25 points).