Question - On January 1, 2015 K inc and L inc formed a joint venture called KL INC. K invested plant and equipment with a book value of $500,000 and a fair value of $800,000 for 30% interest in the venture. The plant and equipment were estimated to provide 5 years of utility to KL.
L contributed assets with a fair value of $2,000,000 including $200,000 in cash for a 70% stake in KL.
KL reposted a net income of $3,000,000 for 2015.
What amount would L record it's investment in KL on January 1?