Q1) On January 1, 2009, Parchment Co. owned 85% of common stock of Silky Co. On that date, Silky's stockholders' equity accounts had given balances:
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Common stock ($5 Par value)
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$250,000
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Additional paid in capital
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105,000
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Retained Earnings
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315,000
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Total Stockholders' Equity
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$670,000
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Balance in Parchment's Investment in Silky Co. account was $642,500. On January 1, 2009, Silky Co. sold 10,000 shares of previously unissued common stock for $15 per share. Parchment acquired 1,000 of these shares.
Make the entry Parchment needs to create and calculate balance in Parchment's investment in Silky account.