The Poonamalie Company paid $2,400,000 in cash for all of Slys' outstanding shares. Attorneys' fees related to the combination were $105,000 paid in cash. A comparison of the book and fair values of Slys' assets and liabilities appears below:

	Book Value	Fair Value
Cash and receivables	$72,000	$72,000
Equity method investments	105,000	120,000
Inventory	366,000	240,000
Plant assets	960,000	600,000
Current liabilities	(204,000)	(204,000)
Long-term debt	(654,000)	(660,000)
Net assets	$645,000	$168,000

Prepare the journal entry made by Poonamalie to record the business combination as a merger.

General Journal
Description	Debit	Credit
Cash and receivables	Answer	Answer
Equity method investments	Answer	Answer
Inventory	Answer	Answer
Plant assets	Answer	Answer
Answer: Merger expenses/Cash/Investment in Slys/Goodwill	Answer	Answer
Merger expenses	Answer	Answer
Current liabilities	Answer	Answer
Long-term debt	Answer	Answer
Answer: Merger expenses/Goodwill/Investment in Slys/Cash	Answer	Answer

Prepare the journal entry made by Poonamalie to record the business combination as a stock acquisition.

General Journal
Description	Debit	Credit
Investment in Slys	Answer	Answer
Answer: Merger expenses/Investment in Slys/Goodwill/Cash	Answer	Answer
Answer: Investment in Slys/Merger expenses/Goodwill/Cash	Answer	Answer