The balance sheet of National Company on December 31, 2020, with related current fair value data, was as follows:

National Company

Balance Sheet (prior to business combination)

December 31, 2020

Carrying Current

Amounts Fair Values

Assets

Current assets $180,000 $ 220,000

Plant assets (net) 640,000 700,000

Intangible assets (net) (All recognizable under

generally accepted accounting principles for

business combinations.) 80,000 90,000

Total assets $900,000 $1,010,000

Liabilities and Stockholders Equity

Current liabilities $ 80,000 $ 80,000

Long-term debt 200,000 190,000

Total liabilities $280,000 $ 270,000

Common stock, no par or stated value $400,000

Retained earnings 220,000

Total stockholders equity $620,000

Total liabilities and stockholders equity $900,000

On December 31, 2020, United Corporation issued $200,000 common stock, $2 par value ($3 fair value) and paid $188,120, for all the net assets of National. Out of pocket costs paid by united, totaled $40,000, for legal fees to effect the business combination.

Instructions:

Prepare journal entries on December 31, 2020, to record United Corporations acquisition of the net assets of National Company. Show the computation of goodwill in the explanation of the relevant journal entry. (Disregard income taxes.)