Reference no: EM131908391

Question - Pony acquired Spur Corporation's assets and liabilities for $500,000 cash on December 31, 2013. Spur dissolved on the date of the acquisition. Spur's balance sheet and related fair values are shown as of that date, below.

Book Value Fair Value

Cash $20,000 $20,000

Accounts Receivable 40,000 38,000

Land 45,000 50,000

Plant and Equipment-net 460,000 410,000

Franchise Agreement 0 160,000

Total Assets $565,000

Accounts Payable $70,000 $70,000

Other Liabilities 120,000 110,000

Common Stock 180,000

Additional Stock 40,000

Retained Earnings 155,000

Total liabilities & Equity $565,000

Required: Prepare the journal entry recorded by Pony as a result of this transaction.