E1-5 Journal entries to record an acquisition with direct costs and fair value/book value differences On January 1, Pan Corporation pays $400,000 cash and also issues 36,000 shares of S10 par common stock with a market value of S660,000 for all the outstanding common shares of Sis Corporation. In addition, Pan pays $60,000 for registering and issuing the 36,000 shares and $140,000 for the other direct costs of the business combination, in which Sis Corporation is dissolved. Summary balance sheet information for the companies immediately before the merger is as follows (in thousands): Cash Inventories Other current assets Plant assets net Total assets Pan Book Value $ 700 240 60 520 $1.520 Sis Book Value $ 80 160 40 360 S640 Sis Fair Value S 80 200 40 560 5880 Business Combinations 21 Pan Book Value $ 320 160 840 200 $1,520 Current liabilities Other liabilities Common stock, S10 par Retained earnings Total liabilities and owners' equity Sis Book Value $ 60 100 400 80 $640 Sis Fair Value $ 60 80 REQUIRED: Prepare all journal entries on Pan's books to account for the acquisition