On December 31, 2013, Lorna Corporation has the following information available:
On December 31, 2013, Gerald Corporation buys an 80% interest in Lorna Corporation for $240,000. On December 31, 2013, the fair values of Lorna's assets and liabilities are equal to the respective book values.
Required:
1. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $20 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
2. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $30 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
3. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $10 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.

Question

On December 31, 2013, Lorna Corporation has the following information available:
  On December 31, 2013, Gerald Corporation buys an 80% interest in Lorna Corporation for $240,000. On December 31, 2013, the fair values of Lorna's assets and liabilities are equal to the respective book values.
Required:
1. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $20 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
2. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $30 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
3. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $10 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.

Quizplus · Accepted Answer

The Answer of On December 31, 2013, Lorna Corporation has the following information available:
  On December 31, 2013, Gerald Corporation buys an 80% interest in Lorna Corporation for $240,000. On December 31, 2013, the fair values of Lorna's assets and liabilities are equal to the respective book values.
Required:
1. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $20 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
2. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $30 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.
3. On January 1, 2014, Lorna Corporation buys 500 shares of common stock from noncontrolling stockholders at $10 per share. Prepare the journal entry for Gerald Corporation on January 1, 2014. Use four decimal places for the ownership percentage.

On December 31, 2013, Lorna Corporation Has the Following Information