On January 1, 20X2, Prost Company acquired all of SKK Corporation's assets and liabilities by issuing 25,400 shares of its $5 par value common stock. At that date, Prost shares were selling at $23 per share. Historical cost and fair value balance sheet data for SKK at the time of acquisition were as follows: Balance Sheet Item Cash & Receivables Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets Accounts Payable Notes Payable Common Stock ($10 par value) Retained Earnings Total Liabilities & Equities Fair Value Historical Cost $ 23,000 119,000 $ 23,000 114,000 619,000 (231,000) $ 525,000 $ 42,000 74,000 170,000 239,000 $525,000 453,000 $595,000 $ 42,000 72,000 Prost paid legal fees for the transfer of assets and liabilities of $22,000. Prost also paid audit fees of $28,000 and listing application fees of $10,000, both related to the issuance of new shares. Required: Prepare the journal entries made by Prost to record the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Merger expense Cash and receivables B 2 Deferred stock issue costs Cash and receivables Answer is not complete. General Journal Debit Credit 22,000 22,000 38,000 38,000 C 3 Cash and receivables 23,000 Inventory 119,000 Buildings and equipment 453,000 Goodwill Accounts payable Notes payable Common stock Additional paid-in capital Deferred stock issue costs 42,000 72,000