On may 1, Soriano Co. reported the following account balances along with their estimated fair values:

Carrying AmountFair Value

Receivables $ 187,100$ 187,100

Inventory 79,400 79,400

Copyrights 126,500 502,500

Patented technology 854,000649,000

Total assets $ 1,247,000 $ 1,418,000

Total liabilities and equities $ 1,247,000

On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, whichwill cease to exist as a separate entity. To facilitate the merger, Zambrano also paid$140,000 to an investment bankingfirm.

The following information was also available:

Zambrano further agreed to pay an extra $85,200 to the formal owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $42,600.

Soriano has a research and development project in process with an appraised value of $211,500. However, the project had not yet reached technological feasibility and the project's assets have no alternative future use.

Prepare Zambrano' journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (If no entry is required for a transaction/event, select No journal entry required "in the first account field.)

a. $646,000

Transaction General Journal Debit Credit

b. $761,300

Transaction General Journal Debit Credit