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
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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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