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Required: Determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange.

Required: Determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange.

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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Journal entry worksheet < A Record the acquisition of Sorden Company's net assets. Note: Enter debits before credits. Event 1 Record entry General Journal Clear entry Debit Credit View general Journal
Transcribed Image Text:Journal entry worksheet < A Record the acquisition of Sorden Company's net assets. Note: Enter debits before credits. Event 1 Record entry General Journal Clear entry Debit Credit View general Journal
Planter Corporation used debentures with a par value of $570,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $554,000. The following balance sheet data were reported by Sorden: Balance Sheet Item Assets Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equities Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Historical Cost Bargain Purchase Gain $ 56,000 108,000 66,000 406,000 (169,000) 14,000 $ 481,000 $ 46,000 89,000 53,000 293,000 $ 481,000 Fair Value $ 53,000 202,000 109,000 308,000 $ 672,000 $ 46,000 Required: Determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Transcribed Image Text:Planter Corporation used debentures with a par value of $570,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $554,000. The following balance sheet data were reported by Sorden: Balance Sheet Item Assets Cash and Receivables Inventory Land Plant and Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equities Accounts Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Historical Cost Bargain Purchase Gain $ 56,000 108,000 66,000 406,000 (169,000) 14,000 $ 481,000 $ 46,000 89,000 53,000 293,000 $ 481,000 Fair Value $ 53,000 202,000 109,000 308,000 $ 672,000 $ 46,000 Required: Determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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