Balance in Parchment's investment in Silky account.
On January 1, 2009, Parchment Co. owned 85% of the common stock of Silky Co. On that date, Silky's stockholders' equity accounts had the following balances:
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Common stock ($5 Par value)
|
$250,000
|
|
Additional paid in capital
|
105,000
|
|
Retained Earnings
|
315,000
|
|
Total Stockholders' Equity
|
$670,000
|
The 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.
Prepare an entry Parchment needs to make and compute the balance in Parchment's investment in Silky account. (Do not round calculations of new interest).