Prepare journal entries on HC Corporations books

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HC Corporation issued 7,000 shares of its $2 par value common stock at a market price of $15 per share to acquire all the outstanding common stock of Barry Corporation. HC paid $2,000 of legal fees for this business combination and $700 for issuing the securities. Barry was merged into HC and dissolved. Information for Barry Corporation immediately before the merger was as follows:

                                    Book value              Fair value

Cash                         2,000                     2,000

Building                      30,000                  27,000

Patents                                                  8,000

Total                                 32,000                 37,000

Accounts payable             5,000               5,000

Common stock                  2,000

Add. paid-in capital          10,000

Retained earnings             15,000

Total                              32,000

Question 1: Prepare journal entries on HC Corporation's books to account for the business combination.

Reference no: EM132463267

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