Accounting by an acquirer  LO6 Russell Ltd acquired all the assets and liabilities of Davies Ltd on 1 July 2021. At this date, the assets and liabilities of Davies Ltd consisted of the following. Carrying amount Fair value Current assets $1 000 000 $ 980 000 Non‐current assets 4 000 000 4 220 000 5 000 000 5 200 000 Liabilities 500 000 500 000 $4 500 000 $4 700 000 Share capital — 100 000 shares $3 000 000 Reserves 1 500 000 $4 500 000 In exchange for these net assets, Russell Ltd agreed to: • issue 10 Russell Ltd shares for every Davies Ltd share — Russell Ltd shares were considered to have a fair value of $10 per share; costs of share issue were $500 • transfer a patent to the former shareholders of Davies Ltd — the patent was carried in the records of Russell Ltd at $350 000 but was considered to have a fair value of $1 million • pay $5.20 per share in cash to each of the former shareholders of Davies Ltd. Russell Ltd incurred $10 000 in costs associated with the acquisition of these net assets. Required 1. Prepare an acquisition analysis in relation to this acquisition. 2. Prepare the journal entries in Russell Ltd to record the acquisition at 1 July 2021.