(TCO 2) On August 15, 2006, Willis Inc. purchased all of the outstanding common stock of Bork Inc. paying $7,400,000 cash. The book values and fair values of Willis’ assets and liabilities are listed below:
Book Value Fair Value
|
Account Receivable |
$1,080,000 |
$975,000 |
|
Inventories |
$1,620,000 |
$2,400,000 |
|
Property Plant and equipment |
$5,400,000 |
$6,975,000 |
|
Account Payable |
$1,800,000 |
$1,800,000 |
|
Bond Payable |
$2,700,000 |
$2,475,000 |
Required:
Prepare the journal entry to record the acquisition by Willis Inc.