3. On August 15, 2023, Willis Inc. acquired all of the outstanding common stock of Bork Inc. paying $7,400,000 cash. The book values and fair values of Bork's assets and liabilities are listed below: Book Value Fair Value Accounts receivable $1,080,000 $ 975,000 Inventories 1,620,000 2,400,000 Property, plant, and equipment 5,400,000 6,975,000 Accounts payable 1,800,000 1,800,000 Bonds payable 2,700,000 2,475,000 Required: 1) Compute the amount of goodwill to be recorded by Willis.

2) Prepare the journal entry to record the acquisition by Willis.