On July 1, 2012, Gissel Corporation purchased Mills Company by paying $250,000 cash and issuing a $150,000 note payable. At July 1, 2012, the balance sheet of Mills Company was as follows. The recorded amounts all approximate current values except for land (fair value of $80,000), inventory (fair value of $125,000), and copyrights (fair value of $15,000).

(a) Prepare the July 1 entry for Gissel Corporation to record the purchase.

(b) Prepare the December 31 entry for Gissel Corporation to record amortization of intangibles. The copyright has an estimated useful life of 4 years with a residual value of $3,000