Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Company on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics:

Immediately prior to the acquisition, Salt Company’s balance sheet reported the following book values and fair values:

Required:
Prepare the journal entry on the books of Pretzel Company to record the acquisition of the assets and assumption of the liabilities of SaltCompany.

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PRETZEL COMPANY Stock Par Value Fair Value $ 25 100 10 Common Preferred 100 SALT COMPANY Balance Sheet January 2, 2012 Book value Farr vatre Cash Accounts receivable (net of $11,000 allowance) Inventory-LIFO cost Land Buildings and equipment (net) Total assets 220,000 275,000 396,000 1,144,000 2,200,000 165,000 165,000 198,000 330,000 550,000 1,144,000 2,387,000 275,000 275,000 495,000 Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings Total liabilities and stockholders' equity 450,000 770,000 396,000 309,000 2,200,000