Answered: Prepare the journal entry to record the…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 19E

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X Corp. Acquired 100% of common stock of Y Corp. X Corp. assumed acquisition expenses as follows (amounts in $)(2.5 marks)

Legal fees 50,000

Accounting fees 30,000

Travel expenses 10,000

Legal fees (stock issue) 20,000

Accounting fees (stock) 15,000

SEC filing fees (stock) 10,000

Prior to the acquisition date, $90,000 have been paid and capitalized to a deferred charges account on the balance sheet. The remaining $45,000 has not been paid or accrued.

Required:

Prepare the journal entry to record the acquisition expenses.

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