6 Question 9 of 11 View Policies Cash Receivables Inventories Current Attempt in Progress On January...

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6 Question 9 of 11 View Policies Cash Receivables Inventories Current Attempt in Progress On January 1, 2024, Novak Company acquired all the assets and assumed all the liabilities of Crane Company and merged Crane into Novak. In exchange for the net assets of Crane, Novak gave its bonds payable with a maturity value of $640,000, a stated interest rate of 10%, interest payable semiannually on June 30 and December 31, a maturity date of January 1, 2034, and a yield rate of 12%. Balance sheets for Novak and Crane (as well as fair value data) on January 1, 2024, were as follows: Land < Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total assets Novak Book Value $271,230 369,560 858,720 700,080 987,900 (316,440) 255,480 (74,960) $3,051,570 Book Value $112,590 164,370 225,350 109,150 397,290 (160,970) 135,170 (85,470) $897,480 Crane Fair Value $112,590 149,110 306,880 305,840 46,540 42,710 -/5 $963,670 ||| : SUPPORT Question 9 of 11 Total assets Current liabilities < Bonds payable, 8% due 1/1/2034, Interest payable 6/30 and 12/31 Common stock, $15 par value Common stock, $5 par value Other contributed capital Retained earnings Total equities $3,051,570 $265,770 1,215,210 954,630 615,960 $3,051,570 $897,480 $91,800 329,800 216,740 185,180 73,960 $897,480 $963,670 $91,800 290,700 ||| - / 5 E ⠀ Prepare the journal entry on the books of Novak Company to record the acquisition of Crane Company's assets and liabilities in exchange for the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) B Question 9 of 11 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) < Account Titles and Explanation > < > > < > Debit Credit - / 5 SUPPORT B Question 9 of 11 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Accounts Receivable Bond Discount Bonds Payable Bond Premium < Account Titles and Explanation Buildings Cash Common Stock Current Liabilities Equipment Gain on Purchase of Business Inventory Land Loss on Purchase of Business No Entry Other Contributed Capital Retained Earnings > > Debit Credit - / 5 !!! : SUPPORT 6 Question 9 of 11 View Policies Cash Receivables Inventories Current Attempt in Progress On January 1, 2024, Novak Company acquired all the assets and assumed all the liabilities of Crane Company and merged Crane into Novak. In exchange for the net assets of Crane, Novak gave its bonds payable with a maturity value of $640,000, a stated interest rate of 10%, interest payable semiannually on June 30 and December 31, a maturity date of January 1, 2034, and a yield rate of 12%. Balance sheets for Novak and Crane (as well as fair value data) on January 1, 2024, were as follows: Land < Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total assets Novak Book Value $271,230 369,560 858,720 700,080 987,900 (316,440) 255,480 (74,960) $3,051,570 Book Value $112,590 164,370 225,350 109,150 397,290 (160,970) 135,170 (85,470) $897,480 Crane Fair Value $112,590 149,110 306,880 305,840 46,540 42,710 -/5 $963,670 ||| : SUPPORT Question 9 of 11 Total assets Current liabilities < Bonds payable, 8% due 1/1/2034, Interest payable 6/30 and 12/31 Common stock, $15 par value Common stock, $5 par value Other contributed capital Retained earnings Total equities $3,051,570 $265,770 1,215,210 954,630 615,960 $3,051,570 $897,480 $91,800 329,800 216,740 185,180 73,960 $897,480 $963,670 $91,800 290,700 ||| - / 5 E ⠀ Prepare the journal entry on the books of Novak Company to record the acquisition of Crane Company's assets and liabilities in exchange for the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) B Question 9 of 11 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) < Account Titles and Explanation > < > > < > Debit Credit - / 5 SUPPORT B Question 9 of 11 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Accounts Receivable Bond Discount Bonds Payable Bond Premium < Account Titles and Explanation Buildings Cash Common Stock Current Liabilities Equipment Gain on Purchase of Business Inventory Land Loss on Purchase of Business No Entry Other Contributed Capital Retained Earnings > > Debit Credit - / 5 !!! : SUPPORT

Answer rating: 100% (QA)

CALCULATIONS Land Fair Value Fair Value of Land from Crane 305840 Buildings Fair Value Fair Value of Buildings from Crane 46540 Equipment Fair Value F... View the full answer