Question
The following book and fair values were available for Beech Company as of June 1: ItemsBook ValueFair ValueInventory$ 609,250$ 572,250Land755,2501,050,000Buildings1,800,0002,152,500Trademarks0849,750Accounts payable(91,000)(91,000)Common stock(2,000,000)0Additional paid-in capital(500,000)0Retained earnings,
The following book and fair values were available for Beech Company as of June 1:
ItemsBook ValueFair ValueInventory$ 609,250$ 572,250Land755,2501,050,000Buildings1,800,0002,152,500Trademarks0849,750Accounts payable(91,000)(91,000)Common stock(2,000,000)0Additional paid-in capital(500,000)0Retained earnings, 1/1(416,500)0Revenues(481,500)0Expenses324,5000Alder Company pays $4,050,000 cash and issues 20,900 shares of its $2 par value common stock (fair value of $50 per share) for all of Beechs common stock in a merger, after which Beech will cease to exist as a separate entity. Stock issue costs amount to $28,600, and Alder pays $44,600 for legal fees to complete the transaction.
Required:
Prepare Alders journal entries to record its acquisition of Beech.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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