Panza Co. is a privately held technology developer and manufacturer in the transportation industry. On October 31, 2019, Panza entered into an agreement with Sancho Co. to purchase certain assets and assume certain liabilities of Sancho (the "Transaction"). The assets and liabilities acquired meet the definition of a business as defined in ASC 805 "Business Combinations". Pursuant to the agreement, Panza will transfer to the owners of Sancho cash of $2 million and 10 million shares of Panza common stock. The terms of the agreement define the "liquidity event period" as the period beginning at the closing of the Transaction and ending on December 31, 2020. If Panza undergoes an IPO during the liquidity event period, and the 10 million shares received by Sancho in the Transaction have a fair value of less than $20 million, Panza would be required to issue up to 2 million additional shares of common stock such that the total fair value of shares held by Sancho equals $20 million (the "Share Value Commitment"). The agreement requires the Share Value Commitment to be settled in shares and under no conditions will Panza be required to settle the Share Value Commitment in cash. Panza has concluded that it is more likely than not that the number of shares required to settle the Share Value Commitment will be less than 2 million. The Transaction closed on December 31, 2019, at which time Panza legally obtained control over the purchased assets and assumed liabilities of Sancho. The fair value of Panza common stock was $1.85 per share on October 31, 2019, $1.95 per share on December 31, 2019, and $1.90 per share on June 30, 2020. Panza hired a third-party valuation specialist, to determine the fair value of the Share Value Commitment. On the basis of the current fair value of Panza common stock, the guaranteed value of $20 million, the probability of an IPO occurring during the liquidity event period, and other relevant valuation assumptions, the valuation specialist estimated the fair value of the Share Value Commitment to be $1.4 million, $400,000, and $1.2 million on October 31, 2019, December 31, 2019, and June 30, 2020, respectively. On December 31, 2019, the fair value of Sancho's identifiable assets was $40 million and the fair value of liabilities was $28 million.

Questions:

(1) What is the total consideration transferred by Panza in the Transaction, and how should that consideration be measured?

(2) What amount of goodwill was recognized in the Transaction?

(3) How should the Share Value Commitment be reported on the December 31, 2019, balance sheet of Panza?

Alternative 1: Classification based on ASC 815-40:

Alternative 2: Classification based on ASC 480-10:

Final Conclusion regarding the Classification of Share Value Commitment:

(4) What journal entries, if any, are required to record the change in fair value for the Share Value Commitment between December 31, 2019, and June 30, 2020?