On December 31, 2020, Yang issued 55,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Martinez. Yang's shares had a fair value on that date of $30 per share. Yang paid $33,000 to an investment bank for assisting in the arrangements. Yang also paid $22,000 in stock issuance costs to effect the acquisition of Martinez. Martinez will retain its incorporation. Required: a) Prepare the journal entry to record the issuance of stock by Yang to execute the purchase. b) Prepare the journal entry to record the payment of the combination costs.

On December 31, 2020, Yang issued 55,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Martinez. Yang's shares had a fair value on that date of $30 per share. Yang paid $33,000 to an investment bank for assisting in the arrangements. Yang also paid $22,000 in stock issuance costs to effect the acquisition of Martinez. Martinez will retain its incorporation. Required: a) Prepare the journal entry to record the issuance of stock by Yang to execute the purchase. b) Prepare the journal entry to record the payment of the combination costs.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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