P Company acquired the assets and assumed the liabilities of S Company on January 1, 2023, for $510,000 when S Company’s balance sheet was as follows:

Fair values of S Company’s assets and liabilities were equal to their book values except for the following:
1. Inventory has a fair value of $126,000.
2. Land has a fair value of $198,000.
3. The bonds pay interest semiannually on June 30 and December 31. The current yield rate on bonds of similar risk is 8%.

Required:
Prepare the journal entry on P Company’s books to record the acquisition of the assets and assumption of the liabilities of S Company.

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Cash Receivables Inventory Land Plant and equipment (net) Total S COMPANY Balance Sheet January 1, 2023 Accounts payable Bonds payable, 10%, due 12/31/2028, Par Common stock, $2 par value Retained earnings Total $ 96,000 55,200 110,400 169,200 466,800 $897,600 $ 44,400 480,000 120,000 253,200 $897,600