Question: On January 2 , Park borrowed $ 6 9 , 2 0 0 and used the proceeds to obtain 8 0 percent of the outstanding

On January 2, Park borrowed $69,200 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strands total fair value. The $69,200 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent).

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