9 Not complete Marked out of 1.00 Preacquisition Contingency Flag question On January 3, 2012. Prance Corporation purchased all of the business operations of Step Corporation for $1,728,000 cash. The acquisition is recorded as a merger. Steps identifiable assets and liabilities are listed below at their fair values: Current assets Noncurrent assets $816,000 1.536.000 Estimated liability defective product lawsuits (268,800) Other habilities (480,0000 The $268,800 estimated liability represented Step's best estimate of ikely losses due to lawsuits pending as of January 3, 2012. Later in 2012, as favorable information regarding the January 3, 2012, status of defective products became available, the estimated liability was reduced to $192.000. Then, in late 2013, after observing large judgments awarded by courts in similar lawsuits against competitors, management revised the estimated Sability upward to $336,000 Prepare the entries made by Prance to record the above events. Original acquisition entry: General Journal Original acquisition entry: General Journal Description Noncurrent assets Goodwill Other liabilities Cash Debit Credit Change in pre-acquisition liability within measurement period: General Journal Description Debit Credit Change in pre-acquisition liability not in measurement period: General Journal Description Debit Credit