James, Inc. acquires all of the assets and liabilities of Kenny Company on

December 31, 2008. The consideration for the deal is 50,000 shares of common

stock with a par value of $10 per share and fair market value of $50 per share

and $1,500,000 in cash. The fair value of Kenny's net identifiable assets is

$3,650,000. Book and fair values of Kenny Company net identifiable assets

follow:

Book Values Fair Values

Current assets $500,000 $500,000

Office equipment (net) 1,700,000 2,500,000

Capitalized software (net) 200,000 600,000

Customer contracts -0- 400,000

Notes payable (300,000) (350,000)

Net assets $2,100,000 3,650,000

Required: Prepare the journal entry on James' books to record the acquisition of

Kenny Company? (Assignment)