Pan Company issued 480,000 shares of $10 par common stock with a fair value of $10,200,000 for all the voting common stock of Set Company. In addition, Pan incurred the following costs:

Legal fees to arrange the business combination $100,000

Cost of SEC registration, including accounting

and legal fees 48,000

Cost of printing and issuing net stock certificates 12,000

Indirect costs of combining, including allocated

overhead and executive salaries 80,000

Immediately before the acquisition in which Set Company was dissolved, Set's assets and equities were as follows (in thousands):

REQUIRED: Prepare all journal entries on Pan's books to record theacquisition.

Transcribed Image Text:

Book Value Fair Value $4400 8.800 $4,000 6000 Current assets Plant assets Liabilities 1,200 8.000 1.200 Common stock Retained earnings 800