1. Kronos Corp purchases all of Rhea Ltd.'s assets and liabilities on January 1, 2033, for $70 million in cash. At the date of acquisition, Rhea's reported assets include current assets of $35 million and plant and equipment of $160 million. It reports current liabilities of $60 million and long-term debt of $110 million. Investigation reveals that Rhea’s plant and equipment is overvalued by $5.5 million and it has an unreported software license valued at $3.5 million.
   • Prepare the necessary journal entry on Kronos’s books to record its acquisition of Rhea on January 1, 2033.
   • Assume that Kronos purchases all of Rhea’s voting stock on January 1, 2033, for $70 million in cash. Prepare the necessary journal entry on Kronos’s books to record the acquisition.