C Corp purchases LLC interest

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#1
BFStax  
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A client of mine is a C Corp that purchased 85% of the membership interest in a two member LLC which therefore becomes a subsidiary of the C Corp. How do I account for this on the C Corp books?

They paid $1m in cash. Credit cash $1m. What is the debit? Controlling Interest in ABC Co (in equity section) $1m?
 

#2
sjrcpa  
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The debit is to an Asset - Investment in ABC Co.
 

#3
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Under GAAP I believe you would consolidate the financials.
 

#4
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Some regulatory agencies require the equity method of accounting for investment in controlled subsidiaries.
 


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