Exercise 14.1 ★ ACCOUNTING BY THE ACQUIRER On 1 July 2016, New Ltd acquired the following assets and liabilities from Day Ltd: Carrying amount Fair value Land Plant (cost $400 000) Inventory Cash Accounts payable Loans $300 000 280 000 80 000 15 000 (20 000 (80 000 ) ) $350 000 290 000 85 000 15 000 (20 000 (80 000 ) ) In exchange for these assets and liabilities, New Ltd issued 100 000 shares that had been issued for $1.20 per share but at 1 July 2016 had a fair value of $6.50 per share. Required 1. Prepare the journal entries in the records of New Ltd to account for the acquisition of the assets and liabilities of Day Ltd. 2. Prepare the journal entries assuming that the fair value of New Ltd shares was $6 per share.