On January 2, 2014, Fisher Corporation acquired all of the voting common stock of Grant Corporation for its own stock worth $10,000,000, in a tax-free statutory merger. Grant s condensed balance sheet on January 2, 2014, appears below: On December 31, 2013, a lawsuit alleging defective products and claiming damages of $1,000,000 was filed against Grant. The estimated liability and related loss, believed to be $800,000, have not yet been accrued. Since the lawsuit had been anticipated, Fisher accepts responsibility for the liability. Required a. Prepare the journal entry made by Fisher to record the acquisition of Grant. There are no unrecorded identifiable intangibles.

b. During 2014, new facts are discovered that reset the value of the lawsuit at the date of acquisition to $300,000.Prepare the journal entry to record the change in the value of the lawsuit. c. Assume that at the end of 2015, based on events occurring after the acquisition date, the lawsuit was settled out of court for $400,000 in cash. Prepare the journal entry to record this event.