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Beach Company merged with Sun Corporation on January 2, 2021 by acquiring all of their net assets for $650,000 cash and issuing a long term
Beach Company merged with Sun Corporation on January 2, 2021 by acquiring all of their net assets for $650,000 cash and issuing a long term note payable for $150,000. Beach Company also paid $30,000 in costs directly related to the acquisition. On the acquisition date of January 2, 2021, Sun Corporation had the following book and fair values related to their balance sheet. Prepare the journal entry/entries that Beach Company should make to record the acquisition of Sun Corporation's net assets. Include the acquisition costs in your answer. Account Title Book Value Fair Value Cash Accounts Receivable $ 20,000 $ 20,000 200,000 170,000 330,000 370,000 Inventory Buildings and Equipment (net) 400,000 480,000 Current Liabilities 80,000 80,000 Common Stock 600,000 Retained Earnings 270,000
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