(L03) (Accounting for Goodwill) Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries.

The following balance sheet of Zweifel is given in an abbreviated form as follows.

ZWEIFEL GALLERIES BALANCE SHEET AS OF DECEMBER 31, 2017 Assets Liabilities and Stockholders’ Equity Cash $100,000 Accounts payable $ 50,000 Land 70,000 Notes payable (long-term) 300,000 Buildings (net) 200,000 Total liabilities 350,000 Equipment (net) 175,000 Common stock $200,000 Copyrights (net) 30,000 Retained earnings 25,000 225,000 Total assets $575,000 Total liabilities and stockholders’ equity $575,000 Moss and Zweifel agree that:

1. Land is undervalued by $30,000.

2. Equipment is overvalued by $5,000.

Zweifel agrees to sell the gallery to Moss for $350,000.

Instructions Prepare the entry to record the purchase of Zweifel Galleries on Moss’s books.