Reference no: EM132567015
Question - On November 1, 2002, Prox Corporation issued 10,000 shares of its Br. 10 par (Br. 30 current fair value) common stock for 85 of the 100 outstanding shares of Senna Company's Br. 100 par common stock, in a business combination. Out-of-pocket of the business combination were as follows:
Finder's and legal fees relating to businesses combination Br. 36, 800
Costs associated with SEC registration statement 20,000
Total out of pocket costs Br. 56,800
On November 1, 2002 the current fair values of Senna's identifiable net assets were equal to their carrying amounts. On the date, Senna's stockholders' equity consisted of the following.
Common stock Br. 100 par Br.10, 000
Additional paid-in capital 140,000
Retained Earnings 70,000
Total stockholders Equity Br.220,000
Required - Prepare journal entries for Prox Corporation on November 1, 2002, to record the business combination with Senna Company.