Question 3. Condensed balance sheets for Rich Company and Jordan Company on January 1, 2016 are as follows: Rich Jordan Current Assets $440,000 $200,000 Plant and Equipment (net) 1,080,000 340,000 Total Assets $1,520,000 $540,000 Total Liabilities $ 230,000 $ 80,000 Common Stock, $10 par 840,000 240,000 value Other Contributed Capital 300,000 130,000 Retained Earnings 150,000 90,000 Total Equities $1,520,000 $540,000 On January 1, 2016 the stockholders of Rich and Jordan agreed to a consolidation whereby a new corporation, Cannon Company, would be formed to consolidate Rich and Jordan. Cannon Company issued 70,000 shares of its $20 par value common stock for the net assets of Rich and Jordan. On the date of consolidation, the fair values of Rich's and Jordan's current assets and liabilities were equal to their book values. The fair value of plant and equipment for each company was: Rich, $1,270,000; Jordan, $360,000. An investment banking house estimated that the fair value of Cannon Company's common stock was $35 per share. Rich will incur $45,000 of direct acquisition costs and $15,000 in stock issue costs. Required: Prepare the journal entries to record the consolidation on the books of Cannon Company assuming that the consolidation is accounted for as an acquisition.