3. On November 1, 2002, Prox Corporation issued 10,000 shares of its Br. 10 par (Br. 30 current fair

value) common stock for 85 of the 100 outstanding shares of Senna Company's Br. 100 par common

stock, in a business combination. Out-of-pocket of the business combination were as follows:

Finder's and legal fees relating to businesses combination Br. 36, 800

Costs associated with SEC registration statement 20,000

Total out of pocket costs Br. 56,800

On November 1, 2002 the current fair values of Senna's identifiable net assets were equal to their

carrying amounts. On the date, Senna's stockholders' equity consisted of the following.

Common stock Br. 100 par Br.10, 000

Additional paid-in capital 140,000

Retained Earnings 70,000

Total stockholders Equity Br.220,000

Required: Prepare journal entries for Prox Corporation on November 1, 2002, to record the business

combination with Senna Company. Assignment