On August 15, 2006, Willis Inc. purchased all of the outstanding common stock of Bork Inc. paying $7,400,000 cash. The book values and fair values of Willis' assets and liabilities are listed below:
Book Value Fair Value
|
Account Receivable
|
$1,080,000
|
$975,000
|
|
Inventories
|
$1,620,000
|
$2,400,000
|
|
Property Plant and equipment
|
$5,400,000
|
$6,975,000
|
|
Account Payable
|
$1,800,000
|
$1,800,000
|
|
Bond Payable
|
$2,700,000
|
$2,475,000
|
Required:
Prepare the journal entry to record the acquisition by Willis Inc.