Paul & Stephan: On January 1, 20X1, Paul, Inc. acquired a 90% interest in Stephan Company. The $45,000 excess of purchase price (parent's share only) was attributable to goodwill. On January 1, 20X3, Stephan Company had the following stockholders' equity:
$\begin{array}{lr}
\text { Common stock, } \$ 10 \text { par } & \$ 100,000 \
\text { Other paid-in capital } & 200,000 \
\text { Retained earnings } & 300,000
\end{array}$ On January 2, 20X3, Stephan sold 2,000 additional shares in a private offering.
-Refer to Paul and Stephan. Stephan issued the new shares for $80 per share; Paul, Inc. purchased all the shares. What is the journal entry that Paul will prepare to record this investment?

Question

Paul & Stephan: On January 1, 20X1, Paul, Inc. acquired a 90% interest in Stephan Company. The $45,000 excess of purchase price (parent's share only) was attributable to goodwill. On January 1, 20X3, Stephan Company had the following stockholders' equity:
 $\begin{array}{lr}
\text { Common stock, } \$ 10 \text { par } & \$ 100,000 \
\text { Other paid-in capital } & 200,000 \
\text { Retained earnings } & 300,000
\end{array}$ On January 2, 20X3, Stephan sold 2,000 additional shares in a private offering.
-Refer to Paul and Stephan. Stephan issued the new shares for $80 per share; Paul, Inc. purchased all the shares. What is the journal entry that Paul will prepare to record this investment?

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The Answer of Paul & Stephan: On January 1, 20X1, Paul, Inc. acquired a 90% interest in Stephan Company. The $45,000 excess of purchase price (parent's share only) was attributable to goodwill. On January 1, 20X3, Stephan Company had the following stockholders' equity:
 $\begin{array}{lr}
\text { Common stock, } \$ 10 \text { par } & \$ 100,000 \
\text { Other paid-in capital } & 200,000 \
\text { Retained earnings } & 300,000
\end{array}$ On January 2, 20X3, Stephan sold 2,000 additional shares in a private offering.
-Refer to Paul and Stephan. Stephan issued the new shares for $80 per share; Paul, Inc. purchased all the shares. What is the journal entry that Paul will prepare to record this investment?

Paul & Stephan: on January 1, 20X1, Paul, Inc On January 2, 20X3, Stephan Sold 2,000 Additional Shares in a 90