L. RESUELVA Included among Gleason Company\'s assets is land purchased for $50,0

Question

L. RESUELVA Included among Gleason Company's assets is land purchased for $50,000 and equipmen $100,000, After using the equipment for three years, Gleason transferred the equipment to a newly created subsidiary, Bromiley Company, along with the land plus cash of $25,000 in exchange for 20,000 shares of Bromiley's S5 par value common stock. At the date of transfer the land and equipment had fair values of $72,000 and $65,000, respectively. Gleason had been depreciating the equipment on a straight-line basis over ten years with no salvage value. Required: A) Prepare the journal entry that should be made by Gleason Company when transferring the assets to Bromiley Company B) Prepare the jounal entry that should be made by Bromiley Company to record receipt of the assets from Gleason Company Gleason Co. Journal Entry TL-Transferred Land Entry GL Bromiley Co, Journal Bromiley Co

Explanation / Answer

Journal entries shall be:

Part A

PArt B

Investment in Bromoley Stock 145000 Acc Dep - Equip 30000 cash 25000 Land 50000 Equipment 1000000

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