Effective December 31, 2013, Zintel Corporation proposes to issue additional shares of its common stock in exchange for all the assets and liabilities of Smith Corporation and Platz Corporation, after which Smith and Platz will distribute the Zintel stock to their stockholders in complete liquidation and dissolution. Balance sheets of each of the corporations immediately prior to merger on December 31, 2013, follow. The common stock exchange ratio was negotiated to be 1:1 for both Smith and Platz.

		Zintel		Smith		Platz
Current assets		$ 1,600,000		$ 350,000		$ 12,000
Long term assets		$ 5,700,000		$ 1,890,000		$ 98,000
Total		$ 7,300,000		$ 2,240,000		$ 110,000
Current liabilities		$ 700,000		$ 110,000		$ 9,000
long - term debt		$ 1,100,000		$ 430,000		$ 61,000
common stock $5 par value		$ 2,500,000		$ 700,000		$ 20,000
Retained earnings		$ 3,000,000		$ 1,000,000		$ 20,000
Total		$ 7,300,000		$ 2,240,000		$ 110,000

Required: Prepare journal entries on Zintels books to record the combination. Assume the following: The identifiable assets and liabilities of Smith and Platz are all reflected in the balance sheets (above), and their recorded amounts are equal to their current fair values except for long-term assets. The fair value of Smiths long-term assets exceed their book value by $20,000, and the fair value of Platzs long-term assets exceed their book values by $5,000. Zintels common stock is traded actively and has a current market price of $15 per share. Prepare journal entries on Zintels books to record the combination. (AICPA adapted)