Reference no: EM132558090

Question - Prepare the journal entries for the acquiring firm under the fair value (cost)

John Corporation exchanges 200,000 shares of newly issued $10 par value common stock with a fair market value of $40 per share for all the outstanding $5 par value common stock of Martin Incorporated, which continues on as a legal entity. Fair value approximated book value for all assets and liabilities of Martin. John paid the following costs and expenses related to the business combination:

Registering and issuing securities 19,000

Accounting and legal fees 150,000

Salaries of John's employees whose-

time was dedicated to the merger 86,000

Cost of closing duplicate facilities 223,000

Required - Prepare the journal entries relating to the above acquisition and payments incurred by John, assuming all costs were paid in cash.