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Holmes acquires 100% of watson in a transaction structured as an acquisition at January 1, 2010 for a payment as follows: Payment to Watson shareholders

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Holmes acquires 100% of watson in a transaction structured as an acquisition at January 1, 2010 for a payment as follows: Payment to Watson shareholders of $6 million cash, notes payable of $4 million due in 3 years at a market interest rate, and 100,000 shares of Holmes common stock with a $5 par and a $20 fair value. a. Under the acquisition method, how much is debited to Holmes Investment Account at 5. January 1, 2010 Under the purchase method, how much is debited to Holmes Investment Account at January 1, 2010 Under both methods how much is the consolidated Investment in Watson. b. c

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