Cafe Ol Company acquired a fast food restaurant for 1 500 000 The
Cafe Olé Company acquired a fast-food restaurant for $1,500,000. The fair market values of the assets acquired were as follows. No liabilities were assumed.
Equipment ......... $380,000
Land ............ 200,000
Building .......... 680,000
Franchise (5-year life) ...... 120,000

Required
a. Calculate the amount of goodwill acquired.
b. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.

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