Five Star Enterprises acquired an $80\%$ interest in Startup Co$.$ The corisideration

for the $80\%$ interest in Startup Co was: $*$ CU $46,000$ shares in Five Star, and $*$ CU

$12,000$ in cash. Five Star incurred costs of CU $1,400$ associated with legal fees

and the valuation of Startup Co$.$ The fair value of the net assets of Startup Co$.$

was CU $64,000($i$.$e$.,80\%$ share was CU $51,200).$ Five Star Enterprises choose to

measure qualifying non$-$controlling interests at the proportionate share in the

recognised amount of the acquiree's identifiable net assets. How should Five

Star account for this acquisition?

Recognise goodwill of CU $6,800$ and acquisition costs of CU $1,400$

Recognise a gain $($negative goodwill$)$ of CU $6,800$ and acquisition costs of

CU $1,400$

Recognise goodwill of CU $6,000$ and acquisition costs of CU $1,400$