Forester Ltd acquired 80% of the ordinary shares of Gordon Ltd on 8 Jan 2014. At that time, the fair values of Gordon Ltd?s net assets were as follows:

On 8 Jan 2014, Gordon Ltd had 1,000,000 ordinary shares, fully paid at $2.50 each. The cost of acquisition under the takeover scheme consisted of 80c cash plus two ordinary shares in Forester Ltd for every ordinary share acquired from Gordon Ltd. Forester Ltd?s ordinary shares were trading at $1.20 each on the ASX. The cost of issuing the required shares in Forester Ltd amounted to $1,600.

REQUIRED

Prepare journal entries in the records of Forester Ltd to account for the above acquisition.

Land Plant and equipment Inventory Accounts receivable Accounts payable $ 1,800,000 980,000 120,000 95,000 18,000