Acquisition analysis    LO6 On 1 July 2021, Martha Ltd and Jones Ltd sign an agreement whereby the operations of Jones Ltd are to be taken over by Martha Ltd. Jones Ltd will liquidate after the transfer is complete. The statements of financial position of the two companies on that day were as follows. Martha Ltd Jones Ltd Cash $ 50 000 $ 20 000 Accounts receivable 75 000 56 000 Inventories 46 000 29 000 Land 65 000 0 Plant and equipment 180 000 167 000 Accumulated depreciation — plant and equipment (60 000) (40 000) Patents 10 000 0 Shares in Cape Ltd 0 26 000 Debentures in Brett Ltd (nominal value) 10 000 0 $376 000 $258 000 Accounts payable $ 62 000 $ 31 000 Mortgage loan 75 000 21 500 10% debentures (face value) 100 000 30 000 Contributed equity: Ordinary shares of $1, fully paid 100 000 0 A class shares of $2, fully paid 0 40 000 B class shares of $1, fully paid 60 000 Retained earnings 39 000 75 500 $376 000 $258 000 Martha Ltd is to acquire all the assets of Jones Ltd (except for cash). The assets of Jones Ltd are recorded at their fair values except for: Carrying amount Fair value Inventories $ 29 000 $ 39 200 Plant and equipment 127 000 140 000 Shares in Cape Ltd 26 000 22 500 In exchange, the A class shareholders of Jones Ltd are to receive one 7% debenture in Martha Ltd, redeemable on 1 July 2022, for every share held in Jones Ltd. The fair value of each debenture is $3.50. Martha Ltd will also provide one of its patents to be held jointly by the A class shareholders of Jones Ltd and for which they will receive future royalties. The patent is carried at $4000 in the records of Martha Ltd, but is considered to have a fair value of $5000. The B class shareholders of Jones Ltd are to receive two shares in Martha Ltd for every three shares held in Jones Ltd. The fair value of each Martha Ltd share is $2.70. Costs to issue these shares amount to $900. Additionally, Martha Ltd is to provide Jones Ltd with sufficient cash, additional to that already held, to enable Jones Ltd to pay its liabilities. The outstanding debentures are to be redeemed at a 10% premium. Annual leave entitlements of $16 200 outstanding at 1 July 2021 and expected liquidation costs of $5000 have not been recognised by Jones Ltd. Costs incurred in arranging the business combination amounted to $1600. Required Prepare the journal entries in the records of Martha Ltd to record the acquisition of Jones Ltd.