Myers Company Ltd. was formed 10 years ago by the issuance of 22,000 common shares to three shareholders. Four years later, the company went public and issued an additional 30,000 common shares.

The management of Myers is considering a takeover in which Myers would purchase all of the assets and assume all of the liabilities of Norris Inc. Two alternative proposals are being considered:

PROPOSAL 1

Myers would offer to pay $400,000 cash for the Norris net assets. In addition, Myers would incur legal, appraisal, and finders fees for a total cost of $5,000.

PROPOSAL 2

Myers would issue 50,000 shares currently trading at $8.00 each for the Norris net assets. Other costs associated with the takeover would be as follows:

Legal, appraisal, and finders fees	$	5,000
Costs of issuing shares		7,000
	$	12,000

Norris shareholders would be offered five seats on the 10-member board of directors of Myers, and the management of Norris would be absorbed into the surviving company.

Balance sheet data for the two companies prior to the combination are as follows:

	Myers				Norris
	Carrying Amount				Carrying Amount				Fair Value
Cash	$	550,000			$	52,500			$	52,500
Accounts receivable		167,200				61,450				56,200
Inventory		374,120				110,110				134,220
Land		425,000				75,000				210,000
Buildings (net)		250,505				21,020				24,020
Equipment (net)		78,945				17,705				15,945
	$	1,845,770			$	337,785
Current liabilities	$	133,335			$	41,115				41,115
Non-current liabilities		410,000				150,000				155,000
Common shares		500,000				100,000
Retained earnings		802,435				46,670
	$	1,845,770			$	337,785

Required:

(a) Prepare the journal entries of Myers for each of the two proposals being considered. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Proposal 1

Record the payment of professional fees expense and costs of issuing shares.

Record the professional fees expense paid.

Proposal 2

Record the acquisition of Norris Inc.

Record the professional fees expense paid and costs of issuing shares.