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From BPP In q 20b(ii) can you please explain the double entry.
Aron company held 3% shares in Smart.Later on when whole share capital of of Smart was acquired was acquired by Given.In order to derecognise the previous and recognise the new one the entry is made as
Debit:Financial assets shares in Given
Credit: Financial assets shares in Smart(is it because debit comes in credit goes out or some other reason)
Thanks
Good Heavens! A double entry question at P2!
We used to have an asset “Investment in Smart”
That disappears and is replaced by an investment in Given
So get rid of the asset (credit Investment in Smart) and record the acquisition of the new asset (debit Investment in Given)
Unless there is other relevant information within the question, that seems to answer it
Ok?
Thank u sir.Looking at the solution I realised what a silly question I asked.Sorry I wasted your time, but glad it sorted out the problem.
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