Maize Corporation pays $532,000 for 100,000 shares to acquire 45% common stock of Teal Investments, Inc on January 5, 2017
Maize Corporation sells 20,000 shares for $40,000 on January 6, 2017. Which of the following is the correct journal entry for the transaction on January 6, 2017? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
A)
Cash 106,400
Long-term Investments-Teal Investments, Inc. 106,400
B)
Long-term Investments-Teal Investments, Inc. 106,400
Cash 40,000
Loss on Disposal 66,400
C)
Long-term Investments-Teal Investments, Inc. 106,400
Cash 106,400
D)
Cash 40,000
Loss on Disposal 66,400
Long-term Investments-Teal Investments, Inc. 106,400
D .Cash received $40,000
Less: Book value on date of disposal (20,000 x $5.32 ) 106,400
Gain or (Loss) $66,400
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