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Question - Zebb Company acquires the net assets of Iowa Company on July 1, 2019. The net assets acquired include buildings that are provisionally estimated to have a fair value of £600,000 at the acquisition date with a 10-year useful life and no salvage value. Depreciation is recorded based on months in service. The remaining unallocated amount of the price paid is £300,000, which is recorded as goodwill.
At the end of 2019 (during measurement period), the final estimated fair value of the acquired buildings is £700,000 with no change in the estimate of useful life or salvage value.
Required - Prepare the two journal entries required on the 31st December 2019.
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