Reference no: EM132547035
Question - James, Inc. acquires all of the assets and liabilities of Kenny Company on December 31, 2008. The consideration for the deal is 50,000 shares of common stock with a par value of $10 per share and fair market value of $50 per share and $1,500,000 in cash. The fair value of Kenny's net identifiable assets is $3,650,000. Book and fair values of Kenny Company net identifiable assets follow:
Book Values Fair Values
Current assets $500,000 $500,000
Office equipment (net) 1,700,000 2,500,000
Capitalized software (net) 200,000 600,000
Customer contracts -0- 400,000
Notes payable (300,000) (350,000)
Net assets $2,100,000 3,650,000
Required - Prepare the journal entry on James' books to record the acquisition of Kenny Company?