Phen Ltd. issued 500,000 common shares of $10 at par and paid $1,000,000 for the net assets of

Sung Ltd. on August 17, 2014. The market value of Phen Ltd.'s stocks was $20 per share at the time.

Sung Ltd. was dissolved immediately after the acquisition. The information related to Sung Ltd.'s

net assets is as follows (in thousands):

Book Value Fair Value

Cash $ 2,000 $ 2,000

Trade receivables 800 600

Inventories 3,200 3,000

Prepaid expenses 1,000 1,000

Land 6,000 6,800

Building-net 10,000 10,100

Equipment-net 3,500 3,000

Trade payable 1,300 1,500

Notes payable 4,300 4,600

Bonds payable 6,600 7,100

Common stock, $5 par 5,300

Retained Earnings 9,000

REQUIRED : Prepare the necessary journal entries for the acquisition.