Hite Corporation is contemplating the acquisition of Smith Company's net assets on December 31 2011. It is considering making an offer, which would include a cash payout of $200,000 along with giving 15,000 shares of its $2 par value common stock that is currently selling for $20 per share. Hite also agrees that it will pay an additional $50,000 on January 1, 2014, if the average net income of Smith' s business unit exceeds $80,000 for 2012 and 2013. The likelihood of reaching that target is estimated to be 75%. The balance sheet of Smith Company as of December 31, 2011 is given below, along with estimated fair values of net assets to be acquired. Book Value Fair Value Current Assets: Notes receivable $33,000. $33,000 Inventory $89,000 $80,000 Prepaid expenses $15,000 $15,000 Investments $36,000 $55,000 Fixed Assets: Land $15,000 $90,000 Buildings $115,000 $170,000 Equipment $256,000 $250,000 Vehicles $32,000 $25,000 Intangibles: Franchise $56,000 $70,000 Total Assets $647,000 $788,000 Book value Fair value Current liabilities: Acvounts payable $63,000 $63,000 Taxes payable $15,000 $15,000 Interest payable $3,000 $3,000 Other liabilities: Bonds payable $250,000 $250,000 Disct on bonds payable ($18,000)($30,000) Stockholders equity: Common stock $50,000 Paid-in-capital in $200,000 excess of par retained earnings $84,000 Total L& E $647,000 Do value analysis prepare the entry on the books of Hite Corporation to record the acquisition of Smith Company. Assume that the net income of the Smith business unit is $120,000 for 2012. As a result, the likelihood of paying the contingent consideration is believed to be 90%. What, if any, adjusting entry is required as of December 31, 2012