(ABC) acquired 100% of the 300,000 issued shares in (XYZ) on 1 July 2021.

The consideration provided to shareholders of XYZ consisted of $1.20 in cash plus 1 share in ABC for each share held.The fair value of the ABC shares on the date of acquisition was $1.50.At the date of acquisition the records of XYZ included the following information: Share Capital$300,000.00, General Reserve$30,000.00, Retained Earnings$410,000.00

All of the assets and liabilities in the records of XYZ were considered to be fairly valued at the acquisition date with the exception of Equipment. On the acquisition date the equipment, which originally cost $496,000, was three years old and had a carrying value of $310,000.The fair value was $400,000.The group will depreciate the equipment over the remaining five years of its original eight year life.Benefits are expected to be received evenly across that period.The expected residual value is zero.

a) Is this consideration fair? Explain why or why not

b) what journal entries need to be completed?