PR Company pays $10,000 in cash and issues stock with a fair value of $40,000 to acquire all of SX Corporations stock. SX will be a subsidiary of PR. Balance sheet accounts just prior to the acquisition are as follows, in trial balance format:

	PR Company	SX Corporation
	Book value	Book value	Fair value
	Dr (Cr)	Dr (Cr)	Dr (Cr)
Current assets	$14,000	$ 2,000	$ 4,200
Property, plant & equipment, net	110,000	10,000	6,000
Identifiable intangible assets	800	4,000	14,000
Current liabilities	(13,000)	(1,600)	(2,000)
Long-term debt	(60,000)	(12,000)	(11,600)
Capital stock	(44,400)	(5,000)
Retained earnings	(8,000)	(8,000)
Accumulated other comprehensive income	(200)	1,000
Treasury stock	800	9,600
Total	$ 0	$ 0

PRs consultants find these items that are not reported on SXs balance sheet:

	Fair value
Potential contracts with new customers	$ 6,000
Advanced production technology	4,000
Future cost savings	2,000
Customer lists	1,000

Outside consultants are paid $200 in cash, and registration fees to issue PRs new stock are $400.

On the consolidated balance sheet at the date of acquisition, elimination (R)

A. credits long-term debt by $400.

B. debits long-term debt by $11,600.

C. credits long-term debt by $11,600.

D. debits long-term debt by $400.

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