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Prepare the journal entries on HC Corporation's books to account for the business combination.

Prepare the journal entries on HC Corporation's books to account for the business combination.

FINANCIAL ACCOUNTING
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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HC Corporation issued 8,500 shares of its $3 par value common stock at a market price of $20 per share to acquire all the outstanding common stock of Barry Corporation. HC paid $3,500 of legal fees for this business combination and $1,700 for issuing the securities. Barry was merged into HC and dissolved. Information for Barry Corporation immediately before the merger was as follows: Cash Building Patents Total Accounts payable Common stock Add. paid-in capital Retained earnings Total Book value 2,000 30,000 32,000 5,000 2,000 10,000 15,000 32,000 Fair value 2,000 25,000 7,000 34,000 5,000 Prepare the journal entries on HC Corporation's books to account for the business combination.
Transcribed Image Text:HC Corporation issued 8,500 shares of its $3 par value common stock at a market price of $20 per share to acquire all the outstanding common stock of Barry Corporation. HC paid $3,500 of legal fees for this business combination and $1,700 for issuing the securities. Barry was merged into HC and dissolved. Information for Barry Corporation immediately before the merger was as follows: Cash Building Patents Total Accounts payable Common stock Add. paid-in capital Retained earnings Total Book value 2,000 30,000 32,000 5,000 2,000 10,000 15,000 32,000 Fair value 2,000 25,000 7,000 34,000 5,000 Prepare the journal entries on HC Corporation's books to account for the business combination.
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