Question 3 of 7 < > .../2.1 E Russell Ltd acquired all the assets and liabilities of Davies Ltd on 1 July 2021. At this date, the assets and liabilities of Davies Ltd. consisted of: Carrying amount Fair value Current assets 1,000,000 980,000 Non-current assets 4,000,000 4,220,000 5,000,000 5,200,000 Liabilities 500,000 500,000 $4,500,000 $4,700,000 Share capital-100,000 shares $3,000,000 Reserves 1,500,000 $4,500,000 In exchange for these net assets, Russell Ltd agreed to: issue 10 Russell Ltd shares for every Davies Ltd share - Russell Ltd shares were considered to have a fair value of $10 per share; costs of share issue were $500 transfer a patent to the former shareholders of Davies Ltd - the patent was carried in the records of Russell Ltd at $350,000 but was considered to have a fair value of $1,000,000 pay $5.20 per share in cash to each of the former shareholders of Davies Ltd. Russell Ltd incurred $10,000 in costs associated with the acquisition of these net assets. Prepare the journal entries in Russell Ltd to record the acquisition at 1 July 2021. (Enter debit entries first followed by credit entries Credit account titles are automatically indented when the amount is entered. Do not indent manually) Debit Credit No. Account and explanation 1. (Re-measurement as part of consideration transferred in a business combination) 2. 3. (Acquisition of Davies Ltd) 4. (Payment of directly attributable costs) (Costs of issuing shares)