Exercise 3-4

On January 1, 2013, Peach Company issued 1,390 of its $20 par value common shares with a fair value of $58 per share in exchange for the 1,870 outstanding common shares of Swartz Company in a purchase transaction. Registration costs amounted to $1,867, paid in cash. Just prior to the acquisition, the balance sheets of the two companies were as follows:

		Peach Company		Swartz Company
Cash		$70,580		$13,760
Accounts receivable (net)		95,150		20,050
Inventory		58,210		22,920
Plant and equipment (net)		94,740		40,040
Land		26,430		19,820
Total assets		$345,110		$116,590
Accounts payable		$67,610		$16,600
Notes payable		77,430		21,390
Common stock, $20 par value		97,200		37,400
Other contributed capital		65,330		22,620
Retained earnings		37,540		18,580
Total equities		$345,110		$116,590

Any difference between the book value of equity and the value implied by the purchase price relates to goodwill.

(a)

Prepare the journal entries on Peach Companys books to record the exchange of stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record exchange of stock)
(To record registration costs)