On January 1, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each of NewTunes shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to On-the-Gos fair value. NewTune also paid $25,000 in stock registration and issuance costs in connection with the merger. Several of On-the-Gos accounts fair values differ from their book values on this date:

Assume that this combination is a statutory merger so that On-theGos accounts will be transferred to the records of NewTune. Onthe-Go will be dissolved and will no longer exist as a legal entity. Prepare all journal entries applicable as will as the Goodwill calculation for NewTune as of the acquisition date.

Book Values Fair Values Receivables $ 65,000 $ 63,000 Trademarks 95,000 225,000 Record music catalog 60,000 180,000 In-process research and development -- 200,000 Notes payable (50,000) (45,000) Precombination book values for the two companies are as follows Cash Receivables Trademarks Record music catalog Equipment (net) Totals Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Totals NewTune On-the-Go $ 60,000 $ 29,000 150,000 65,000 400,000 95,000 840,000 60,000 320,000 105,000 $ 1,770,000 $ 354,000 $ (110,000) $ (34,000) (370,000) (50,000) (400,000) (50,000) (30,000) (30,000) (860,000) (190,000) $(1,770,000) $(354,000)