On January 1, 16, Brown Inc. acquired Larson Company’s net assets in exchange for Brown’s common stock with a par value of $100,000 and a fair value of $800,000. Brown also paid $10,000 in direct acquisition costs and $15,000 in stock issuance costs.
On this date, Larson’s condensed account balances showed the following:
|Book Value||Fair Value|
|Plant and Equipment||440,000||480,000|
|Intangibles – Patents||80,000||120,000|
|Other Paid-in Capital||(120,000)|
Required: Record Brown’s purchase of Larson Company’s net assets.
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