On January 1, 20X1, Paul, Inc

Multiple Choice

On January 1, 20X1, Paul, Inc. acquired a 90% interest in Stephan Company. The $45,000 excess of purchase price (parent's share only) was attributable to goodwill. On January 1, 20X3, Stephan Company had the following stockholders' equity: On January 2, 20X3, Stephan sold 2,000 additional shares in a private offering. Stephan issued the new shares for $70 per share; Paul, Inc. purchased 600 of the shares. As a result of this sale, there is a(n)

A) gain on the consolidated income statement of $5,000.
B) decrease in the controlling interest paid-in excess of $5,000.
C) increase in the controlling interest paid-in capital in excess of par of $5,000
D) increase in the controlling interest Retained Earnings of $5,000