On July 1, 2020, Novak Corporation purchased Young Company by paying $260,300cash and issuing a $128,000note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows.

Cash $50,900 Accounts payable $202,000

Accounts receivable 91,500 Stockholders' equity 245,400

Inventory 108,000 $447,400

Land 40,000

Buildings (net) 74,800

Equipment (net) 70,500

Trademarks 11,700

$447,400

The recorded amounts all approximate current values except for land (fair value of $62,300), inventory (fair value of $125,100), and trademarks (fair value of $17,520).

Prepare the July 1 entry for Novak Corporation to record the purchase.

Account Titles and Explanation Debit Credit

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

Prepare the December 31 entry for Novak Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $3,800.

Account Titles and Explanation Debit Credit

(a)

(b)