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Sullivan's Island Company began operating a subsidiary in a foreigJanuary 1,2020 country on January...

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Accounting

Sullivan's Island Company began operating a subsidiary in a foreigJanuary 1,2020 country on January 1,2020, by investing capital in the amount of 64,000 pounds. The subsidiary immediately borrowed 150,000 pounds on a five-year note with 6 percent interest payable annually beginning on January 1,2021. The subsidiary then purchased for 214,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1,2020, the subsidiary rented the building for three years to a group of local attorneys for 8,100 pounds per month. By year-end, rent payments totaling 81,000 pounds had been received, and 16,200 pounds was in accounts receivable. On October 1,2020,2,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,950 pounds back to Sullivan's Island Company on December 31,2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: $ 2.20=1 Pound
October 1,20202.25=1
December 31,20202.28=1
Average for 20202.24=1

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