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Problem 2-1 Condensed balance sheets for Phillips Company and Solina Company on January 1, 2013, are as follows: Current assets Plant and equipment (net) Total assets Phillips $170,140 460,200 $630,340 Solina $81,660 146,790 $228,450 Total liabilities Common stock, $10 par value Other contributed capital Retained earnings (deficit) Total liabilities and equities $94,850 $34,040 327,500 163,090 136,920 57,860 71,070 (26,540 ) $630,340 $228,450 On January 1, 2013, the stockholders of Phillips and Solina agreed to a consolidation. Because FASB requires that one party be recognized as the acquirer and the other as the acquiree, it was agreed that Phillips was acquiring Solina. Phillips agreed to issue 20,230 shares of its $10 par stock to acquire all the net assets of Solina at a time when the fair value of Phillips' common stock was $16 per share. On the date of consolidation, the fair values of Solina's current assets and liabilities were equal to their book values. The fair value of plant and equipment was, however, $155,970. Phillips will incur $20,460 of direct acquisition costs and $6,440 in stock issue costs. Prepare the journal entries on the books of Phillips to record the acquisition of Solina Company's net assets. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record assets and liabilities acquired) (To record the direct acquisition costs) (To record the stock issue costs) Account Titles and Explanation Acquisition Costs Expense Cash Common Stock Current Assets Goodwill Liabilities No Entry Other Contributed Capital Plant and Equipment