On September 1, 2013, the directors of Halbert Corp. approached the directors of Delcon Ltd. with the following proposal for the acquisition of the issued shares of Delcon, conditional on acceptance by 90% of Delcon shareholders by November 30, 2013:

€¢ Two common shares in Halbert plus $3.10 cash for every preferred share in Delcon, payable at acquisition date.

€¢ Three common shares in Halbert plus $1.20 cash for every common share in Delcon. Half the cash is payable at acquisition, and the other half in one year€™s time.

By November 30, 90% of the common shareholders and all of the preferred shareholders of Delcon had accepted the offer. The directors of Halbert decided not to acquire the remaining common shares. Share transfer forms covering the transfer were dated November 30, 2013, and showed a price per Halbert common share of $4.20. Halbert€™s incremental borrowing rate is 8% p.a.

The statement of financial position of Delcon at November 30, 2013, was as follows:

Halbert then appointed a new board of directors of Delcon. This board took office on December 1, 2013, and immediately:
€¢ revalued the asset Shares in Other Companies to its market value (assume no tax effect) and
€¢ issued common shares of $32,000 to common shareholders, each shareholder being allocated 2 common shares for every 10 common shares held.
Required
Prepare all journal entries (in general form) to record the above transactions in the records of (a) Halbert and (b) Delcon.

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DELCON LTD Statement of Financial Position as at November 30, 2013 $120,000 Current assets Non-current assets: Land and buildings Property, plant, and equipment Less: Accumulated depreciation Shares in other companies listed on stock exchange at cost (market $190,000) $203,000 168,000 (45,000) 30,000 Government bonds, at cost Total non-current assets Total assets 50,000 406,000 526,000 30,000 $496,000 Current liabilities Net assets Equity Share capital 80,000 common shares 50,000 6% preferred shares Retained earnings $160,000 100,000 $260,000 236,000 $496,000 Total equity