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QUESTION THREE (15 marks in total...1 part to the question) Mars Pty Ltd is a travel services company. In order to increase its market share, it has purchased all the ordinary issued share capital (100 000 ordinary shares fully paid) of Bay Hotel and resort, on 1 April 2014 The terms of the acquisition were: a) cash $400 000 on settlement; b) issue of 2 fully paid ordinary shares in Mars Pty Ltd plus $3 cash for every ordinary share in Bay Hotel and resort. The cash is payable at acquisition. The share price of Mars has been fluctuating between $1.70 to $3.60 per share. When negotiations commenced the share price was $1.85, and once the general public were informed it rose to $2.80. When control was achieved by Mars on 1 April 2014, the share price was $2.90 The directors of Mars have agreed to compensate the shareholders of Bay Hotel and resort should the share price of Mars fall below $2.50 in the first 6 months after the acquisition. The amount of the compensation will be equal to the difference between the lowest share price and $2.50. The directors are confident the share price will not fall below $2.40 in that period. At the date of acquisition, the fair value of Bay Hotel and resort's identifiable net assets were $1 200 000 Fees paid to legal advisers in relation to the acquisition totalled $10 000 Required: Prepare all the relevant journal entries in the records of Mars Pty Ltd to record the acquisition of Bay Hotel and resort, in accordance with IFRS 3 Business Combinations. Show all workings. (15 marks)