The scenario Keystone Machinery Pty Ltd, is buying a business from Boss Machinery Ltd, who has been operating as a sole trader. The purchase consideration is $110,000 cash and 25,000 shares of $1 each. Boss financial records at the date of sale on 30 June 2022 showed the following:

Table 3 Business Acquisition

Cash at bank 60,000 DEBIT

Accounts receivable 12,000 DEBIT

Vehicle at Cost 60,000 DEBIT

Accumulated depreciation vehicle 25,000 CREDIT

Plant & equipment 80,000DEBIT

Accumulated depreciation plant & equipment 20,000 CREDIT

Accounts payable 15,000 CREDIT

Mortgage 25,000 CREDIT

The company took over all the assets and liabilities of the business, except the mortgage and cash on 1 July 2022. The purchase consideration was settled on 31 July 2022. The fair value of the assets was determined as:

Accounts receivable 9,000

Plant and Equipment 65,000

Vehicles 30,000

On 31 August 2022 Keystone Machinery Ltd decided to issue a prospectus inviting applications for 400,000 ordinary shares at an issue price of $1.00.On application, $0.40 was payable for these shares, with a second instalment of $0.60 payable after allotment. The prospectus stated that any excess application money would be transferred to instalments.

By the closing date of 30 September 2022, applications for 420,000 ordinary shares were received. Allotment occurred on 31 October 2022. By 30 November 2022, all the instalment payments had been made, except for $2,000.

To complete this part of the assessment you are required to:

1. prepare the general journal entries for acquiring the business from Boss Ltd

2. prepare the general journal entries to record the discharge of the purchase consideration

3. prepare all the general journal entries related to the receipt of all monies and shares issued by Keystone Machinery Ltd on 31 August 2022 4. narrations are not required but student must include dates.