HC Corporation issued 7,000 shares of its $2 par value common stock at a market price of
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HC Corporation issued 7,000 shares of its $2 par value common stock at a market price of $15 per share to acquire all the outstanding common stock of Barry Corporation. HC paid $2,000 of legal fees for this business combination and $700 for issuing the securities. Barry was merged into HC and dissolved. Information for Barry Corporation immediately before the merger was as follows:
| Book value | Fair value |
Cash | 2,000 | 2,000 |
Building | 30,000 | 27,000 |
Patents | | 8,000 |
Total | 32,000 | 37,000 |
Accounts payable | 5,000 | 5,000 |
Common stock | 2,000 | |
Add. paid-in capital | 10,000 | |
Retained earnings | 15,000 | |
Total | 32,000 | |
Prepare the journal entries on HC Corporation’s books to account for the business combination.
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
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