Planter Corporation used debentures with a par value of $635,000 to acquire 100 percent of Sorden...

 

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Planter Corporation used debentures with a par value of $635,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $618,000. The following balance sheet data were reported by Sorden: Assets Balance Sheet Item Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equities Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Required: Historical Cost Fair Value $ 62,000 105,000 $ 44,000 189,000 63,000 410,000 (167,000) 11,000 96,000 287,000 $ 616,000 $ 484,000 $ 40,000 $ 40,000 92,000 55,000 297,000 $ 484,000 Prepare the journal entry that Planter recorded at the time of exchange. A Record the acquisition of Sorden Company's net assets. Note: Enter debits before credits. Event General Journal Debit Credit 1 Cash and receivables 44,000 Inventory 189,000 Land 96,000 Plant and equipment 287,000 Discount on bonds payable 17,000 Accounts payable 40,000 Bonds payable 635,000 > Record entry Clear entry View general journal Planter Corporation used debentures with a par value of $635,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $618,000. The following balance sheet data were reported by Sorden: Assets Balance Sheet Item Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equities Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Required: Historical Cost Fair Value $ 62,000 105,000 $ 44,000 189,000 63,000 410,000 (167,000) 11,000 96,000 287,000 $ 616,000 $ 484,000 $ 40,000 $ 40,000 92,000 55,000 297,000 $ 484,000 Prepare the journal entry that Planter recorded at the time of exchange. A Record the acquisition of Sorden Company's net assets. Note: Enter debits before credits. Event General Journal Debit Credit 1 Cash and receivables 44,000 Inventory 189,000 Land 96,000 Plant and equipment 287,000 Discount on bonds payable 17,000 Accounts payable 40,000 Bonds payable 635,000 > Record entry Clear entry View general journal