Fred Smith, owner of Smith Interiors, is negotiating for the purchase of Green Lamp Shop. The following balance sheet of Green is given in abbreviated form as follows:

Green Lamp Shop

Balance Sheet

As of December 31, 2017

Assets

Cash $200,000

Land 70,000

Buildings (net) 200,000

Equipment (net) 175,000

Copyrights (net) 30,000

Total Assets 675,000

Liabilities & Stockholders Equity

Accounts Payable $150,000

Notes payable (long-term) 300,000

Total Liabilities 450,000

Common Stock 200,000

Retained Earnings 25,000

Total Stockholders Equity 225,000

Total Liabilities & S/Equity 675,000

Smith and Green agree that:

1. Land is undervalued by $90,000
2. Equipment is overvalued by $15,000

Green agrees to sell the Lamp Shop to Smith for $500,000

Instructions

Prepare the journal entry to record the purchase of Green Lamp Shop on Smiths books.