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

Carrying Amount Fair Value Receivables $ 137,500 $ 137,500 Inventory 82,000 82,000 Copyrights 148,500 511,500 Patented technology 903,000 713,000 Total assets $ 1,271,000 $ 1,444,000 Current liabilities $ 238,000 $ 238,000 Long-term liabilities 674,000 657,200 Common stock 100,000 Retained earnings 259,000 Total liabilities and equities $ 1,271,000

On that day, Poppop paid cash to acquire all of the assets and liabilities of Summerlight, which will cease to exist as a separate entity. To facilitate the merger, Poppop also paid $144,000 to an investment banking firm.

The following information was also available:

Poppop further agreed to pay an extra $76,400 to the former owners of Summerlight only if they meet certain revenue goals during the next two years. Poppop estimated the present value of its probability adjusted expected payment for this contingency at $38,200.

Summerlight has a research and development project in process with an appraised value of $231,500. However, the project has not yet reached technological feasibility and the projects assets have no alternative future use. Prepare Poppops journal entries to record the Summerlight acquisition assuming its initial cash payment to the former owners was (a) $723,600 & (b) $836,900.