4. (TCO B) How are stock issuance costs and direct combination costs treated in a business combination which is accounted for as an acquisition when the subsidiary will retain its incorporation? (Points: 2)

Stock issuance costs are a part of the acquisition costs and the direct combination costs are expensed

Direct combination costs are a part of the acquisition costs and the stock issuance costs are a reduction to additional paid-in capital

Direct combination costs are expensed and stock issuance costs are a reduction to additional paid-in capital

Both are treated as part of the acquisition price

Both are treated as a reduction to additional paid-in capital