ABC Corporation incurred legal fees as part of the acquisition of the net assets of XYZ Inc. How should ABC account for the legal fees associated with the acquisition?

Question $8$ options:

The legal fees should be recorded as a direct reduction of retained earnings.

The legal fees should be expensed immediately.

The legal fees should be added to the purchase price when determining goodwill.

The legal fees should be deducted from the purchase price when determining goodwill.