Problem 7-3B Calculate and record goodwill (LO7-2)

Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,470,000 in cash. The book values and fair values of Pioneers assets and liabilities were:

	Book Value				Fair Value
Accounts Receivable	$	620,000			$	520,000
Buildings		3,970,000				4,670,000
Equipment		110,000				200,000
Accounts Payable		(880,000	)			(880,000	)
Net assets	$	3,820,000			$	4,510,000

Required:

1. Calculate the amount Northern Equipment should report for goodwill.

2. Record Northern Equipments acquisition of Pioneer Equipment Rental. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)