Asked by Shannen Relova on May 22, 2024
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Panton, Inc. acquired 18,000 shares of Glotfelty Corp. several years ago for $30 per share when Glotfelty had a book value of $450,000. Before and after that time, Glotfelty's stock traded at $30 per share. At the present time, Glotfelty reports the following stockholders' equity: 
Glotfelty issues 5,000 shares of previously unissued stock to the public for $40 per share. None of this stock is purchased by Panton.Prepare Panton's journal entry to recognize the impact of this transaction.
Stock Traded
Refers to shares of a company that are bought and sold in financial markets or exchanges.
Stockholders' Equity
Represents the residual interest in the assets of a corporation after deducting liabilities, essentially the net assets that belong to shareholders.
Unissued Stock
Shares that have been authorized in a company's charter but have not yet been issued to investors.
- Examine the effects of equity trades on a parent company's stake in a subsidiary.
Verified Answer
SB
Learning Objectives
- Examine the effects of equity trades on a parent company's stake in a subsidiary.