Asset acquisition vs. stock purchase (fair value equals book value) Assume that an investor purchases the business of an investee. The fair value of the investee company is equal to its reported book value and the fair values of the individual net assets are equal to their reported book values. The investee company reports the following balance sheet on the acquisition date: $5,600 Accounts payable Cash Accounts receivable Inventories Current assets 11,200 Accrued liabilities 22,400 39,200 Current liabilities Long-term liabilities $11,200 16,800 28,000 22,400 PPE, net 44,800 Total assets $95,200 Total liabilities and equity $95,200 56,000 Stockholders' equity Parts a. and b. are independent of each other. a. Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company. If no additional debit entries are required, select "No entry" as the answer. Cash General Journal Description Debit Credit Accounts receivable Inventories PPE, net Accounts payable Accrued liabilities Long-term liabilities b. Provide the journal entry if the investor pays cash and purchases all of the stock of the investee's shareholders. General Journal Description Debit Credit