1.Hillsburg Corporation purchased the net assets of Marvel Inc. on January 2, 2019 for $1,690,000 cash and also paid $15,000 in direct acquisition costs. Marvel dissolved as of the date of the acquisition. Marvel's balance sheet on January 2, 2019 was as follows:

Accounts receivable-net$190,000Current liabilities$235,000

Inventory480,000Long term debt650,000

Land110,000Common stock ($1 par)25,000

Building-net630,000Paid-in capital150,000

Equipment-net240,000Retained earnings 590,000

Total assets$1,650,000Total liab. & equity $1,650,000

Fair values agree with book values except for inventory, land, and equipment, which have fair values of $640,000, $140,000 and $230,000, respectively. Marvel has customer contracts valued at $20,000.

Required:

Prepare Hillsburg's general journal entry for the cash purchase of Marvel's net assets.

Answer:General journal entry for the purchase of Marvel's net assets: