Thomas Ltd purchased from Edison Ltd the following parcel of assets and liabilities representing a business. In exchange for these assets and liabilities, Thomas Ltd issued 30,000 shares, and the fair value of each share at the acquisition date is $2.20. After the transaction, Edison Ltd continued in business otherwise unaffected.

	Cost ($)	Carrying amount ($)	Fair value ($)
Accounts receivable	19 000	18 000	16 000
Machinery	100 000	75 000	80 000
Accounts payable	4 000	4 000	4 000

Additional information:

Edison Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Thomas Ltd estimated the fair value of this contingent liability to be $20,000.

Required:

a) Prepare all necessary journal entries to record the above acquisition. (Using the provided journal entry template to enter your answer; workings/calculations or narrations are NOT required.)

b) If the parcel of assets and liabilities does not represent a business, list any accounts that would be recorded in a) but should not be recognized anymore in Thomas Ltd's record. Explain the reason.