Sun Corporation concluded the fair value of Tender Company was $63,000 and paid
ID: 2468814 • Letter: S
Question
Sun Corporation concluded the fair value of Tender Company was $63,000 and paid that amount to acquire its net assets. Tender reported assets with a book value of $54,000 and fair value of $63,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Sun also paid $13,000 to a search firm for finder’s fees related to the acquisition.
Prepare the journal entries to be made by Sun to record its investment in Tender and its payment of the finder’s fees. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Sun Corporation concluded the fair value of Tender Company was $63,000 and paid that amount to acquire its net assets. Tender reported assets with a book value of $54,000 and fair value of $63,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Sun also paid $13,000 to a search firm for finder’s fees related to the acquisition.
Explanation / Answer
Journal entry to be made by SUN to record its investment in Tender Date Account title Debit Credit Assets $63,000 Goodwill $23,000 Liabilities $23,000 Cash $63,000 Journal entry to be made by SUN to record payment of finder's fees Date Account title Debit Credit Merger Expense $13,000 Cash $13,000
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