p company acquired the assets and assumed the liabilities of s company on january 1 4372684

P Company acquired the assets and assumed the liabilities of S Company on January 1, 2010, for $510,000 when S Company’s balance sheet was as follows:S COMPANYBalance SheetJanuary 1, 2010Cash……………… $ 96,000Receivables…………… 55,200Inventory…………… 110,400Land……………… 169,200Plant and equipment (net) ……… 466,800Total……………… $897,600Accounts payable…………. $ 44,400Bonds payable, 10%, due 12/31/2015, Par… 480,000Common stock, $2 par value……. 120,000Retained earnings……….. 253,200Total……………… $897,600Fair values of S Company’s assets and liabilities were equal to their book values except for the following:1. Inventory has a fair value of $126,000.2. Land has a fair value of $198,000.3. The bonds pay interest semiannually on June 30 and December 31. The current yield rate on bonds of similar risk is 8%.Required:Prepare the journal entry on P Company’s books to record the acquisition of the assets and assumption of the liabilities of S Company.View Solution:
P Company acquired the assets and assumed the liabilities of

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