The balance sheet of MBC Television reports intangible assets. Assume that MBC purchased the intangibles as part of the acquisition of another company, which carried these figures:

Requirements 

1. Make the journal entry to record MBC's purchase of the other company for \(\$ 1,000,000\), half in cash and half for a note payable.

2. What special asset does MBC's acquisition of the other company identify? How should MBC account for this asset after acquiring the other company? Explain in detail. 

Transcribed Image Text:

Book value of assets............ Market value of assets...... Liabilities........... $ 800,000 1,100,000 400,000