On January 1, 20X2, Prost Company acquired all of SKK Corporation’s assets and liabilities by issuing 24,000 shares of its $4 par value common stock. At that date, Prost shares were selling at $22 per share. Historical cost and fair value balance sheet data for SKK at the time of acquisition were as follows:

Prost paid legal fees for the transfer of assets and liabilities of $14,000.
Prost also paid audit fees of $21,000 and listing application fees of $7,000, both related to the issuance of new shares.

Required

Prepare the journal entries made by Prost to record the business combination.

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Balance Sheet Item Cash & Receivables Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets Accounts Payable Notes Payable Common Stock ($10 par value) Retained Earnings Total Liabilities & Equities Historical Cost $ 28,000 94,000 600,000 (240,000) $482,000 $ 41,000 65,000 160,000 216,000 $482,000 Fair Value $ 28,000 122,000 470,000 $620,000 $ 41,000 63,000