Doug s Diner acquired a fast food restaurant for 1 500 000 The fair
Doug’s Diner 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
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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