On 1 January 20x6, Company X acquires the entire share capital of $500,000 comprising of 500,000 ordinary shares in Company Y. Retained earnings as that date amounted to $100,000. In previous years, Company Y has issued employee share awards for which the balance in the employee share option reserve stands at $80,000 as at 1 January 20x6. The purchase consideration is $950,000 in cash. Net assets of Company Y as at 1 January 20x6 amounted to $680,000. The fair value of the net identifiable assets as at 1 January 20x6 is $820,000.

As part of the business combination, Company X exchanges replacement awards for the share-based payment awards of Company Y, for which employees had completed the vesting period of 5 years before the business combination. No post-combination service is required from the employees in return for the replacement awards.

The market-based measure of the replacement and Company Y’s awards at the acquisition date amounted to

$300,000 and $200,000 respectively.

Calculate the portion of the market based measure of the replacement award at the date of acquisition to be allocated to the pre-combination and post combination services and prepare the accounting entries for the transaction. Ignore the tax effects for the question.