1. Organic Farms, Inc. acquires Crunchy Foods Corporation for $120 million in cash, in a merger. Crunchy Foods’ balance sheet at the date of acquisition is as follows (in millions):

Current assets	$30
Plant and equipment	$70
Intangible assets	$20
Total assets	$120
Current liabilities	$25
Long-term debt	$45
Capital stock	$30
Retained earnings	$40
Treasury stock	$(20)
Total liabilities and equity	$120

A consulting firm values Crunchy Foods’ plant and equipment at $35 million and its reported intangibles at $25 million. Due to declining interest rates, long-term debt has a fair value of $50 million. There are no unreported identifiable intangibles, and all other assets and liabilities are reported at amounts approximating fair value.

• Prepare the journal entry Organic Farms makes to record its acquisition of Crunchy Foods.