On December 31, 20X2, Jobe issued 54,000 new shares of its $10 par value stock i

Question

On December 31, 20X2, Jobe issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lake. Jobe's shares had a fair value on that date of $35 per share. Jobe paid $34,000 to an investment bank for assisting in the arrangements. Jobe also paid $24,000 in stock issuance costs to effect the acquisition of Lake. Lake will retain its incorporation. -1) Prepare the journal entry to record the issuance of common stock by Jobe. -2) Prepare the journal entry to record the payment of combination costs. -3) Determine consolidated net income for the year ended December 31, 20x2. -4) Determine consolidated additional paid-in capital at December 31, 20x2.

Explanation / Answer

-1) Prepare the journal entry to record the issuance of common stock by Jobe. -

2) Prepare the journal entry to record the payment of combination costs. -

Note : Data is missing for consolidated net income & consolidated additional paid-in capital

Account Title & Explaination Debit Credit Investment in Lake A/c 1890000 Common Stock 540000 Additional Paid in Capital 1350000

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