Reference no: EM132615546

Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company's assets and liabilities in a planned merger Immediately prior to the combination, Sark's assets and liabilities were as follows:

Assets

Cash & Equivalents           $ 41,000

Accounts Receivable         73,000

Inventory                       144,000

Land                              200,000

Buildings                        1,520,000

Equipment                      638,000

Accumulated Depreciation   431, 000

Total Assets                  $2,185, 000

Liabilities & Equities

Accounts Payable                      $35,000

Short-Term Notes                       50,000

Payable Bonds                            500,000

Payable Common Stock ($10 par)      1,000,000

Additional Paid-In Capital                325,000

Retained Earnings                          275,000

Total                                          $2,185,000

Immediately prior to the combination, Plint reported $250,000 additional paid-in capital and $1,350,000 retained earnings. The fair values of Sark's assets and liabilities were equal to their book values on the date of combination except that Sark's buildings were worth $1,500,000 and its equipment was worth $300,000. Costs associated with planning and completing the business combination totaled $38,000, and stock issue costs totaled $22,000. The market value of Plint's stock at the date of combination was $4 per share

Question 1: What are the journal entries that would appear on Plint's books to record the combination if Plint issued 450,000 shares.