Dear all,
I have a quick question regarding what would be the journal entries for these two situations for Section 357(c) transactions:
Situation #1
Aggregate adjust basis of all assets being transferred to corporation: $300,000
Aggregate loan liability being transferred to corporation: $100,000
If this is the case, would journal entries for the corporation be:
Dr. Fixed asset $300,000
Cr. Liability $100,000
Cr. Common Stock $200,000
Situation #2
Aggregate adjust basis of all assets being transferred to corporation: $100,000
Aggregate loan liability being transferred to corporation: $300,000
If this is the case, would journal entries for the corporation be:
Dr. Fixed asset $300,000
Cr. Liability $300,000
I came up with the journal entries, but would really appreciate correction if these are incorrect for the situation.