On 1 January 20x5, Company A acquired all the 800,000 ordinary shares in Company B for $900,000 in cash. The carrying amount or book value of net assets of Company B as at the date of acquisition amounted to $650,000. The fair value of the net identifiable assets as at 1 January 20x5 is $710,000.
During the year, Company B has also issued share options to its employees. As at the date of acquisition, only one tranche of share options has been issued and the carrying value in the share option reserve in equity amounted to $70,000. The options have vested in the employees and Company A does not replace them on acquisition. There are also no changes to the terms to the share options with the acquisition by Company A.
Additionally, Company B has 1,000 preference shares outstanding as at 1 January 20x5. These shares, which were issued at par of $1 per share, are classified as equity in accordance with IAS 32 Financial Instruments:
Presentation. The preference shares do not carry any voting rights and will provide their holders a right to a preferred dividend over the payment of any dividend to the ordinary shareholders. Upon liquidation, the preference shareholders are not entitled to a proportionate share of the net assets. The fair value of these preference shares at the date of acquisition is $5,000.

Required:
Calculate the goodwill on acquisition and prepare the accounting entries for the transaction. Ignore tax effects for this transaction.