On January 2, 2000, Pop and Son Corporation merged their operations through a business combination accounted for as a pooling of interests. The $300,000 direct costs of combination were paid in cash by the surviving entity on January 2, 2000. At December 31, 1999, Son held 25,000 shares of Pop stock acquired at $20 per share. Summary balance sheet information for Pop and Son Corporations at December 31, 1999, was as follows (in thousands):

Required:
Assume that the surviving corporation was Pop Corporation and that Pop issued 1,000,000 shares of its own stock for all the outstanding shares of Son Corporation.
a. Prepare journal entries on the books of Pop Corporation to record the business combination.
b. Prepare a balance sheet for Pop Corporation on January 2, 2000, immediately after the business combination?

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Pop Corporation Son Corporation Current assets Plant and equipment-net Investment in Pop 6,500 10,000 $4,500 10,000 500 $15,000 ssets $16,500 Liabilities Common stock, $10 par Additional paid-in capital Retained earnings Total equities 1,500 10,000 2,000 3,000 $16,500 $3,000 8,000 3,000 1,000 $15,000