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HC Corporation issued 7,000 shares of its $2 par value common stock at a market price of $15 per share to acquire all the outstanding
- HC Corporation issued 7,000 shares of its $2 par value common stock at a market price of $15 per share to acquire all the outstanding common stock of Barry Corporation. HC paid $2,000 of legal fees for this business combination and $700 for issuing the securities. Barry was merged into HC and dissolved. Information for Barry Corporation immediately before the merger was as follows:
| Book value | Fair value |
Cash | 2,000 | 2,000 |
Building | 30,000 | 27,000 |
Patents |
| 8,000 |
Total | 32,000 | 37,000 |
Accounts payable | 5,000 | 5,000 |
Common stock | 2,000 |
|
Add. paid-in capital | 10,000 |
|
Retained earnings | 15,000 |
|
Total | 32,000 |
|
Prepare the journal entries on HC Corporations books to account for the business combination.
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