KERCISES LOH23 Effects of qualifying as a business on asset acquisitions Assume that on January 1, 2016 an investor company paid $2,900 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Investee's Book Value Estimated Fair Value Asset (Liability) Production equipment..... Factory Land ... Patents.. Accrued liabilities.. $ 300 1,500 100 0 (120) $ 260 1.430 390 650 (130) In addition, assume that the investor paid an additional $100 of transaction costs to a third party. The om the investee's financial records immediately before the exchange. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement. Parts a, and b. are independent of each other. a Provide the journal entry recorded by the investor company assuming that the net assets transferred from the investee do not qualify as a "business," as that term is defined in FASB ASC Master Glossary Chapter 1 Accounting for interior 35 b. Provide the journal entry recorded by the investor company assuming that the net assets transferred from the investee qualify as a "business," as that term is defined in FASB ASC Master Glossary KERCISES LOH23 Effects of qualifying as a business on asset acquisitions Assume that on January 1, 2016 an investor company paid $2,900 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Investee's Book Value Estimated Fair Value Asset (Liability) Production equipment..... Factory Land ... Patents.. Accrued liabilities.. $ 300 1,500 100 0 (120) $ 260 1.430 390 650 (130) In addition, assume that the investor paid an additional $100 of transaction costs to a third party. The om the investee's financial records immediately before the exchange. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement. Parts a, and b. are independent of each other. a Provide the journal entry recorded by the investor company assuming that the net assets transferred from the investee do not qualify as a "business," as that term is defined in FASB ASC Master Glossary Chapter 1 Accounting for interior 35 b. Provide the journal entry recorded by the investor company assuming that the net assets transferred from the investee qualify as a "business," as that term is defined in FASB ASC Master Glossary