On June 30, 2018, Streeter Company reported the following account balances:

Receivables	$	64,000			Current liabilities	$	(11,500	)
Inventory		94,000			Long-term liabilities		(74,000	)
Buildings (net)		86,500			Common stock		(90,000	)
Equipment (net)		31,000			Retained earnings		(100,000	)
Total assets	$	275,500			Total liabilities and equities	$	(275,500	)

On June 30, 2018, Princeton Company paid $311,500 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $7,700 in legal fees. Princeton also agreed to pay $59,200 to the former owners of Streeter contingent on meeting certain revenue goals during 2019. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $17,000.

In determining its offer, Princeton noted the following pertaining to Streeter:

• It holds a building with a fair value $42,100 more than its book value.
• It has developed a customer list appraised at $21,000, although it is not recorded in its financial records.
• It has research and development activity in process with an appraised fair value of $39,400. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use.
• Book values for the receivables, inventory, equipment, and liabilities approximate fair values.

• Record the acquisition of Streeter company.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1

• Record the legal fees related to the combination.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
2