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On January 1, 20X2, Frost Company acquired all of TKK Corporation's assets and liabilities by issueing 24,000 shares of its $4 par value common Stock.
On January 1, 20X2, Frost Company acquired all of TKK Corporation's assets and liabilities by issueing 24,000 shares of its $4 par value common Stock. At that date, Frost shares were selling at $22 per share. Historical cost and fair value balance sheet data for TKK at the time of acquisition were as follows: Balance Sheet Item Historical Cost Fair Value Cash and Receivables 28,000 28,000 Inventory 94,000 122,000 Buildings & Equipment 600,000 470,000 Less: Accumulated Depreciation (240,000) Total Assets 482,000 620,000 Accounts Payable 41,000 41,000 Notes Payable 65,000 63,000 Common Stock ($10 par Value) 160,000 Retained earnings 216,000 Total Liabilities and Equities 482,000 104,000 Frost paid legal fees fro the transfer of assets and liabilities of $14,000. Frost also paid audit fees of $21,000 and listing application fees of $7,000, both related ot the issuance of new shares. a. Prepare the journal entries made by Frost to record the business combination
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