P1-3 Journal entries and balance sheet for an acquisition On January 2, 2016, Pam Corporation issues its own $10 par common stock for all the outstanding stock of Sun Corporation in an acquisition. Sun is dissolved. In addition, Pam pays $40,000 for reg- istering and issuing securities and $60,000 for other costs of combination. The market price of Pam's stock on January 2, 2016, is $60 per share. Relevant balance sheet information for Pam and Sun Corporations on December 31, 2015, just before the combination, is as follows (in thousands): Sun Historical Cost $20 60 180 Cash Inventories Other current assets Land Plant and equipment-net Total assets Liabilities Capital stock, $10 par Additional paid-in capital Retained earnings Total liabilities and owners' equity Pam Historical Cost $ 240 100 200 160 1,300 $2,000 $ 400 1,000 400 Sun Fair Value $ 20 120 200 200 700 $1.240 $ 100 400 $700 $100 200 100 300 $700 200 $2,000 REQUIRED 1. Assume that Pam issues 25,000 shares of its stock for all of Sun's outstanding shares. a. Prepare journal entries to record the acquisition of Sun. b. Prepare a balance sheet for Pam Corporation immediately after the acquisition. 2. Assume that Pam issues 15,000 shares of its stock for all of Sun's outstanding shares. a. Prepare journal entries to record the acquisition of Sun. b. Prepare a balance sheet for Pam Corporation immediately after the acquisition