Question: In a transaction accounted for using the purchase method where cost is less than fair value, which statement is true? A. Negative goodwill is recorded

In a transaction accounted for using the purchase method where cost is less than fair value, which statement is true?

A. Negative goodwill is recorded

B. A deferred credit is recorded

C. Long-term assets of the acquired company are reduced in proportion to their fair values. Any excess is recorded as deferred credit.

D. Long-term assets of the acquired company are reduced in proportion to thier fair values. Any excess is recorded as an extraordinary gain.

E. Long-term assets and liabilites of the acquired company are reduced in proportion to their fair values. Any excess is recorded as an extraordinary gain.

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