Internet Corporation is considering the acquisition of Homepage Corporation and has obtained the following audited condensed balance sheet: Internet and Homepage

Excerpt
par value) Other Paid-in Capital Retained Earnings Buildings (net) Equipment (net) 50,000 20,000 70,000 $200,000 60,000 $200,000 Internet also acquired the following fair values for Homepage’s assets and liabilities: $ 55,000 60,000 90,000 75,000 Current assets Land Buildings (net) Equipment (net) Current Liabilities (60,000) $220,000

Internet Corporation is considering the acquisition of Homepage Corporation and has obtained the following audited condensed balance sheet: Internet and Homepage agree on a price of $280,000 for Homepage’s net assets. Prepare the necessary journal entry to record the purchase given the following: Internet issues its $5 par value stock as consideration. The fair value of the stock at the acquisition date is $50 per share. Additionally, Internet incurs $5,000 of security issuance costs. Transcribed Image Text: Balance Sheet
December 31, 2016
Assets
Liabilities and Equity
$ 40,000
20,000
80,000
Current assets
Current Liabilities
$ 60,000
Land
Capital Stock (50,000
shares, $1 par value)
Other Paid-in Capital
Retained Earnings
Buildings (net)
Equipment (net)
50,000
20,000
70,000
$200,000
60,000
$200,000
Internet also acquired the following fair values for Homepage’s assets and liabilities:
$ 55,000
60,000
90,000
75,000
Current assets
Land
Buildings (net)
Equipment (net)
Current Liabilities
(60,000)
$220,000

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