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Planter Corporation used debentures with a par value of $627,000 to acquire 100 percent of Sorden Companys net assets on January 1, 20X2. On that
Planter Corporation used debentures with a par value of $627,000 to acquire 100 percent of Sorden Companys net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $610,000. The following balance sheet data were reported by Sorden:
Balance Sheet Item | Historical Cost | Fair Value | |||||||
Assets | |||||||||
Cash & Receivables | $ | 62,000 | $ | 43,000 | |||||
Inventory | 102,000 | 185,000 | |||||||
Land | 63,000 | 95,000 | |||||||
Plant & Equipment | 403,000 | 290,000 | |||||||
Less: Accumulated Depreciation | (153,000 | ) | |||||||
Goodwill | 19,000 | ||||||||
Total Assets | $ | 496,000 | $ | 613,000 | |||||
Liabilities and Equities | |||||||||
Accounts Payable | $ | 44,000 | $ | 44,000 | |||||
Common Stock | 99,000 | ||||||||
Additional Paid-In Capital | 56,000 | ||||||||
Retained Earnings | 297,000 | ||||||||
Total Liabilities & Equities | $ | 496,000 | |||||||
Required: Prepare the journal entry that Planter recorded at the time of exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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