Delta Ltd and Woods Ltd are family-owned ginger producing companies operating in Buderim in Queensland. Delta Ltd is owned by the Lewis family while the Meninga family owns Woods Ltd. The Lewis family has only one son, Wally, and he is engaged to the daughter of the Meninga family. Because the son is currently managing Delta Ltd, it is proposed that, after the wedding, Woods Ltd be liquidated and Wally would manage the whole of the two companies assets.

Information about the assets and liabilities of Woods Ltd at 1 January 2017 is as follows:

................Carrying amount Fair value

Buildings $540 000 $495 000

Accumulated depreciation (63 000)

Land 558 000 756 000

Machinery 350 000 327 600

Accumulated depreciation (26 000)

Irrigation equipment 218 000 202 500

Accumulated depreciation (20 000)

Vehicles 162 000 154 800

Accumulated depreciation (18 000)

Cash 18 000 18 000

Accounts receivable 126 000 112 500

Payables 72 000 72 000

Loan from Broncos bank 432 000 432 000

Delta Ltd valued a brand at $40 000 that was used by Woods Ltd but had not been recognised by Woods Ltd as it was internally generated. The brand was considered to have an indefinite life. The accounting records of Woods Ltd at 1 January 2017 did not include accrued interest on the loan of $12 000.

The Lewis and Meninga families agreed to the following terms in relation to the joining together of the two companies:

• Delta Ltd is to acquire all the assets of Woods Ltd except for cash and one of the vehicles (having a carrying amount of $40 500, and a fair value of $43 200) and assume all the liabilities except for the loan from the Broncos bank and any accrued interest. The vehicle will be given to Mr and Mrs Meninga. Woods Ltd will go into liquidation.
• Delta Ltd is to supply sufficient additional cash to enable the loan from the Broncos Bank to be paid off and to cover the liquidation expenses of $4950. It will also give $135 000 to be distributed to the Meninga family to help pay for the cost of the wedding.
• Delta Ltd is to give a piece of its land in the Buderim Hills overlooking the Maroochydore coastline to Woods Ltd to be distributed to the Meninga family to build a retirement home. The land is recorded in the records of Delta Ltd at $72 000 and has a fair value of $198 000.
• Delta Ltd is to issue 100 000 shares these having a fair value of $12.60 per share. These are to be distributed via Woods Ltd to the daughter of Mr and Mrs Meninga to give her a continuing interest in the family business.
• The business combination occurred on 1 January 2017 as per the agreement with Delta Ltd incurring legal and accounting costs of $22 500 and share issue costs of $16 000.

Required: Prepare the journal entries in the records of Delta Ltd to account for the business combination.