Abc Company Creates A Subsidiary Xyz Company

ABC Company creates a subsidiary, XYZ Company. ABC transfers Cash of $50,000, Land with both a cost and book value of $75,000, and a Building with a cost of $150,000 and a book value of $100,000 to XYZ, in exchange for all 50,000 shares of XYZ’s $4 par common stock.XYZ’s journal entry to record the transfer would include:Question 1 answersa. a credit to Additional Paid-In Capital for $25,000b. a debit to Common Stock, $4 Par for $200,000.c. a credit to Land for $75,000.d. a debit to Building for $100,000.

Posted in Uncategorized