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Please explain the entry! Point Co. purchased 90% of Sharpe Corp.'s voting stock on January...

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Accounting

Please explain the entry!

Point Co. purchased 90% of Sharpe Corp.'s voting stock on January 1, 20X2 for $5,580,000. Prior to the acquisition, Point held a 10% equity position in Sharpe Company. On January 1, 20X2 Pointe's 10% investment in Sharpe has a book value of $340,000 and a fair value of $620,000. On January 1, 20X2 Point records the following:

A. Debit Gain on revaluation of Sharpe's stock $280,000

B. Credit Gain on revaluation of Sharpe's stock $280,000

C. Credit Investment in Sharpe stock $5,860,000

D. Debit Investment in Sharpe stock $6,200,000

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