Aurora Corp. acquired Payette Company on December 31, 2015. The following information concerning Payette's assets and liabilities was assembled on the acquisition date:

Instructions:
1. Make the journal entry necessary for Aurora Corp. to record the purchase, assuming the purchase price was $1,500,000 in cash.
2. Why might Aurora be willing to pay such a high price for Payette?
3. Repeat (1), assuming the purchase price is $350,000.
4. Repeat (1), assuming the purchase price is $150,000.

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Per Company's Books As Adjusted by Appraisal and Audit Assets 307,000 179,200 486,200 340,000 260,000 600,000 Land, buildings, and equipment (net) Liabilities (25,000) (160,000) 301,200 (23xxx) (160,000) 415,000 Long-term liabilities