On January 1, 2013, New Ltd. acquired the following assets and liabilities from Daylight Ltd.:

In exchange for these assets and liabilities, New issued 100,000 shares that had been issued for $1.20 per share but at January 1, 2013, had a fair value of $6.50 per share.
Required
(a) Prepare the journal entries in the records of New to account for the acquisition of the assets and liabilities of Daylight.
(b) Prepare the journal entries assuming that the fair value of New shares was $6 per share.

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Land Plant (cost $400,000) Inventory Cash Accounts payable Loans Carrying amount $300,000 280,000 80,000 15,000 (20,000) (80,000) Fair value $350,000 290,000 85,000 15,000 (20,000) (80,000)