Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $ 5,600,000 in cash. The book values and fair values of Pioneer’s assets and liabilities were:

Required:
1. Calculate the amount paid for goodwill.
2. Record Northern Equipment’s acquisition of Pioneer Equipment Rental.

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Receivables Property, plant, and equipment Intangible assets Liabilities Book Value 750,000 4,100,000 110,000 750000 $4,210,000 Fair Value $ 650,000 4,800,000 700,000 (750,000) Net assets