Midland States Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland States Telecom purchased goodwill as part of the acquisition of Sheldon Wireless Enterprises, which had the following figures:
Book value of assets ................................ $ 900,000
Market value of assets .............................. 1,400,000
Market value of liabilities .......................... 530,000
Requirements
1. Journalize the entry to record Midland States Telecom's purchase of Sheldon Wireless for $440,000 cash plus a $660,000 note payable.
2. What special asset does Midland States Telecom's acquisition of Sheldon Wireless identify? How should Midland States Telecom account for this asset after acquiring Sheldon Wireless? Explain in detail.