Profeet Company purchased the Starless Company in a nontaxable combination consummated as a stock acquisition. Profeet issued 10,000 shares of $5 par value common stock, with a market value of $70, in exchange for all the stock of Starless. The following information about Starless Company is available on the combination date.

Required:
Prepare the journal entry to record the acquisition, taking into account taxeffects.

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STARLESS COMPANY $600,000 Book value of net assets Deferred tax liability from using Modified Accelerated Cost Recover Systenm (MACRS) depreciation for tax purposes 24,000 Other Items Book Value Fair Value Fixed assets Long-term debt The current and future tax rate is expected to be 40%. $410,000 450,000 $490,000 500,000