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Penn Company owns 85% of the capital stock of a foreign subs…

Posted byAnonymous August 10, 2026August 10, 2026

Questions

Penn Cоmpаny оwns 85% оf the cаpitаl stock of a foreign subsidiary located in Portugal. Penn's accountant has just translated the accounts of the foreign subsidiary and determined that a debit translation adjustment of $60,000 exists. If Penn uses the fully adjusted equity method for its investment, what entry should it record in order to recognize the translation adjustment? Entry Options Option Accounts and explanation Debit Credit A Investment in Portuguese subsidiary 51,000      Other comprehensive income—translation adjustment 51,000 B Other comprehensive income—translation adjustment 51,000      Investment in Portuguese subsidiary 51,000 C Other comprehensive income—translation adjustment 60,000      Investment in Portuguese subsidiary 60,000 D No entry required        

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Tags: Accounting, Basic, qmb,

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