Power Company purchased Sark Corporation’s net assets on January 3, 20X2, for $625,000 cash. In addition, Power incurred $5,000 of direct costs in consummating the combination. At the time of acquisition, Sark reported the following historical cost and current market data:

Required

Give the journal entry or entries with which Power recorded its acquisition of Sark’s net assets.

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Balance Sheet Item Cash & Receivables Inventory Buildings & Equipment (net) Patent Total Assets Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equities Book Value $ 50,000 100,000 200,000 $350,000 $ 30,000 100,000 80,000 140,000 $350,000 Fair Value $ 50,000 150,000 300,000 200,000 $700,000 $ 30,000