LO1 24. Asset acquisition vs. stock purchase (fair value equals book value) Assume that an investor purchases the business of an investee. The investee company reports the fol- lowing balance sheet on the acquisition date: Cash Inventories Long-term liabilities 5,600 Total assets. $23,800 Total liabilities and equity $23,800 Parts a. and b. are independent of each other. a. Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company (assume that the fair value of the assets is equal to their book values). Provide the journal entry if the investor pays cash and purchases all of the stock of the investee's shareholders. b. 25. Asset acquisition vs. stock purchase (fair value is greater than book value) LO1 Assume the investor purchases the same assets in #24, but now assume that the cash purchase price is $21,000. The investor is willing to purchase the investee's business for $21,000 because it appraises its PPE, net at $19,600, and because it values the investee's customer list at $4,200 (the fair values of all other assets and liabilities are equal to their book values). Parts a. and b. are independent of each other. a. Provide the jounal entry if the investor purchases the assets and assumes the liabilities of the investee company Provide the journal entry if the investor purchases all of the stock of the investee's shareholders. b