Noncontrolling

Durango purchased 60% of the shares of Purgatory on January 1 of Year 1 for $20 in cash and issued shares of common stock with a fair value $40. Durango also paid broker fees related to the acquisition of $10 and investment banking fees related to the stock issuance of $5. Prepare the journal entries on Durangos books to record the purchase of Purgatory shares.

Account title	Debit	Credit
To record the cash payment for the Purgatory Shares

Account title	Debit	Credit
To record the common stock issued for the Purgatory shares

Account title	Debit	Credit
To record the direct acquisition costs

Account title	Debit	Credit
To record the stock issuance costs

Explain the rational for the accounting treatment for the broker fees and the investment banking fees.

Question: I need the four Journal entries. The description should give you an idea of the account. Explain the rational for the accounting treatment for the broker fees and the investment banking fees.

Durango and Subsidiary Date of Acquisition Jan 1 Year 1
	Durango	Purgatory
Accounts	Company	Company
Balance Sheet
Cash	$ 230	$ 5
Inventory	0	25
Equipment	1,000	30
Investment in Puratory	60	-0-
Total assets	$ 1,290	$ 60
Liabilities	$ (350)	$ (20)
Common stock	(500)	(25)
Retained earnings	(440)	(15)
Total liabilities and equity	$ (1,290)	$ (60)
Parentheses indicate a credit balance.