Journal
Entry for investment in subsidiary
The investment of parent company made in subsidiary
is recorded at cost. The investment is debited and cash or bank is credited as
case may be.
Investment
in Subsidiary Journal Entry
ABC Company purchase 30,000 shares in XYZ for $ 5
each shares. How the transaction will be recorded in ABC & Co.
Solution
This transaction will be recorded as under
|
Date
|
Particulars
|
Dr
|
Cr.
|
|
|
Investment
|
$
150,000
|
|
|
|
Cash
|
|
$ 150,000
|
The above investment in XYZ will appear in ABC
financial statement as under.
|
Investment
in XYZ & C0
|
$ 150,000
|
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