Cafe Ole' Company acquired a fast-food restaurant for $1,500,00. The fair market values of the assets acquired were as follows. No liabilities were assumeb.
Equipment $380,000
Land 200,00
Building 680,000
Franchise (5-year life) 120,000
a. Calculate the amount of goodwill acquired.
b. Prepared the journal entry to record the amortization of the franchise fee at the end of year 1.