Cossack Company purchased Village Enterprises. The following fair values were associated with the items acquired in this business acquisition:

The fair value associated with Village Enterprises€™ government contacts is not based on any legal or contractual relationship. In addition, for obvious reasons, there is no open market trading for intangibles of this sort.
1. Make the journal entry necessary for Cossack Company to record the purchase if the purchase price is $900,000 cash.
2. Assume that the purchase price is $35,000 cash. Make the journal entry necessary to record thepurchase.

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Cost Fair Value Accounts receivable Inventory .. Government contacts Equipment (net) Short-term loan payable 200,000 200,000 50,000 100,000 50,000 (200,000 (200,000) $140,000 200,000 100,000 40,000 Net assets ..