On January 1, 20X2, Frost Company acquired all of TKK Corporations assets and liabilities by issuing 24,000

On January 1, 20X2, Frost Company acquired all of TKK Corporation’s assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Frost shares were selling at $22 per share. Historical cost and fair value balance sheet data for TKK at the time of acquisition were as follows:

Frost paid legal fees for the transfer of assets and liabilities of $14,000. Frost also paid audit fees of $21,000 and listing application fees of $7,000, both related to the issuance of new shares.

Required
Prepare the journal entries made by Frost to record the businesscombination.

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Balance Sheet Item Cash & Receivables Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets Historical Cost Fair Value $ 28,000 94,000 600,000 (240,000) S 28,000 122,000 470,000 482,000 41,000 65,000 160,000 216,000 $482,000 $620,000 S 41,000 63,000 Accounts Payable Notes Pavable Common Stock ($10 par value) Retained Earnings Total Liabilities & Equities