Per and the Dala Horse

Per and the Dala Horse by Hickox, Rebecca. paperback edition. ISBN: 9780440414254.

When a Swedish farmer dies, his eldest son inherits the farm, a sturdy workhorse, and a plow. The middle son comes by a fine riding horse, and Per, the youngest, receives a handsomely carved and painted Dala horse. Though his brothers laugh, Per guesses that his horse will prove useful. And when the trolls of the underworld work their mischief, neither the workhorse nor the riding horse can compare with Pers magnificent Dala horse.