Journal entry for a business acquisition Grand Designs Ltd decided to buy parts of a competitor’s business, which was cutting back operations.

For a price of $4.2 million ($1 million down payment and the rest in four equal annual instalments, plus interest at 12 per cent per annum), Grand Designs got inventory it valued at $280 000, land it valued at $1.5 million, a retail store building it valued at $1.8 million, furniture and equipment it valued at $470 000 and some dealership rights it valued at $40 000. Grand Designs also agreed to pay a bank loan of $130 000 secured by the inventory.

Write a journal entry to record Grand Designs Ltd’s purchase.