Princess has acquired several other companies. Assume that Princess purchased Kelleher for $$12,000,000$ cash. The book value of Kelleher's assets is $$15,000,000($market value, $$16,000,000),$ and it has liabilities of $$14,000,000($market value, $$14,000,000).$

Requirements

Compute the cost of goodwill purchased by Princess.

Record the purchase of Kelleher by Princess.

Requirement $1.$ Compute the cost of goodwill purchased by Princess.

Purchase price to acquire Kelleher

Market value of Kelleher's assets

Less: Market value of Kelleher's liabilities

Less: Market value of Kelleher's net assets

Goodwill

Requirement $2.$ Record the purchase of Kelleher by Princess, Inc. $($Record debits first, then credits. Select the explanation on the last line of the journal entry table.$)$

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