Karlin Ltd acquired all the assets and assumed all the liabilities of Jim Ltd on 1 July 2022. In exchange, Karlin Ltd agreed to issue 3 Jim Ltd shares for every Jim Ltd share held and pay cash of $4.2 per share to the former shareholders of Jim Ltd for each share held in Jim Ltd. Karlin Ltd and Jim Ltd shares were assessed to have a fair value of $8.5 per share and $6.5 per share, respectively.

On 1 July 2022, the financial position of Jim Ltd was as follows:

		Carrying amount	Fair value
Assets
	Cash	120,000	120,000
	Accounts receivable	500,000	500,000
	Plant	1,365,000	1,040,000
	Accumulated depreciation - plant	(390,000)
	Equipment	485,000	452,500
	Accumulated depreciation -Equipment	(65,000)
	Land	720,000	865,000
	Vehicles	520,000	396,500
	Accumulated depreciation -vehicles	(130,000)
Total assets		3135000
Liabilities
	Accounts payable	55,000	55,000
	Bank Loans	260,000	260,000
Total liabilities		315,000
Equity
	Share capital - 100,000 shares	1,625,000
	Retained earnings	1,300,000
Total equity		2,925,000
Total liabilities and equity		3,250,000

Additional information:

• The assets of Jim Ltd did not include a trademark that was valued by Karlin Ltd at $15,000.
• Jim Ltd had reported a contingent liability relating to a guarantee given by that company to another entity on 30 June 2022. Jim Ltd did not record the guarantee as a liability because of the difficulty of measuring the liability. The fair value of this contingent liability was assessed as $50,000.
• Karlin Ltd incurred $15,000 in costs in relation to accounting and legal fees in relation to its acquisition of Jim Ltd.Costs of share issue were $2,000.

Required:

Prepare the journal entries in the records of Karlin Ltd in relation to its acquisition of Jim Ltd on 1 July 2022.