Question1 On 1st of January 2020 L Company acquired the net assets and assumed the liabilities of S company when balance sheet was as the following:

1. Assume that L company paid 8,200,000 to acquire the assets and assume the liabilities of S company

. A. Prepare journal entry on the books of L company to record the purchase of assets and the assumption of liabilities of S company.

B. Prepare the journal entry on the books of Scompany to record the sale of the net assets to L company.

2. Prepare journal entry on the books of L company to record the purchase of assets and the assumption of liabilities of S company, assuming that L company paid 9,200,000 to acquire the assets and assume the liabilities of S company.

Account Receivable Notes Receivable Inventory Land Equipment Total Assets Account Payable Bonds Payable Common Stock Retained Earnings Total Equity Book Value 8000,000 350,000 1,000,000 2,000,000 3,000,000 7,150,000 450,000 700,000 5,000,000 1,000,000 7,150,000 Fair Value 900,000 450,000 2,100,000 3,600,000 3,400,000 10,450,000 450,000 800,000