On April 1, 2016, Paape Company paid $950,000 for all the issued and outstanding stock of Simon Corporation. The recorded assets and liabilities of the Simon Corporation on April 1, 2016, follow:

Cash

$ 80,000

Inventory

240,000

Property and equipment (net of accumulated depreciation of $320,000)

480,000

Liabilities

(180,000)

On April 1, 2016, it was determined that the inventory of Simon had a fair value of $190,000, and the property and equipment (net) had a fair value of $560,000. The entry to distribute the excess of fair value over book value will include:

a.

A debit to inventory of $50,000

b.

A credit to the investment in Simon Corporation of $620,000

c.

A debit to goodwill of $330,000

d.

A credit to the investment in Simon Corporation of $330,000