Question

On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd
issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado
Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.
At this date the statement of financial position of Eldorado Ltd was as follows:
                                                       Carrying amount         Fair value
Machinery                                                $40,000                 $67,000
Fixtures & fittings                                       60,000                  68,000
Vehicles                                                      35,000                  35,000
Current assets                                             10,000                 12,000
Current liabilities                                       (16,000)               (18,000)
Total net assets                                        $129,000
Share capital (80,000 shares at $1.00 per share) $80,000
General reserve                                           20,000
Retained earnings                                       29,000
Total equity                                               $129,000
Required:
Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

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