Question
In business combination, the fair value of combinee bonds payable was $ 120,000 and the carrying amount of bonds payable was $ 100,000. The journal
In business combination, the fair value of combinee bonds payable was $ 120,000 and the carrying amount of bonds payable was $ 100,000. The journal entry to allocate liquidated company to identifiable assets and liabilities with remainder to goodwill includes:
a. Debit to premium on bonds payable $ 20,000.
b. Credit to bonds payable $ 100,000.
c. Credit to bonds payable $ 120,000.
d. Debit to discount on bonds payable $ 20,000.
On March 31, 2020, United Corporation acquired for $750,000 cash all the outstanding common stock of National Company when Nationals balance sheet showed total assets of $1,000,000 and total liabilities of $ 300,000. Out-of-pocket costs of the business combination may be disregarded. The current fair values of assets and liabilities of National were equal to their carrying amounts except for plant assets which was more than carrying amount by $ 50,000.The amount of goodwill is:
a. $ 50,000.
b. $ 0.
c. $ 150,000.
d. $ 100,000.
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