Internet Corporation Is Considering the Acquisition of Homepage Corporation and Has

question 29

Essay

Internet Corporation is considering the acquisition of Homepage Corporation and has obtained the following audited condensed balance sheet:
Internet also acquired the following fair values for Homepage's assets and liabilities:
$\begin{array}{lr}\text { Current assets } & \$ 55,000 \\\text { Land } & 60,000 \\\text { Buildings (net) } & 90,000 \\\text { Equipment (net) } & 75,000 \\\text { Current Liabilities } & (60,000) \\& \$ 220,000\end{array}$ Internet and Homepage agree on a price of $280,000 for Homepage's net assets. Prepare the necessary journal entry to record the purchase given the following scenarios:
a.
Internet pays cash for Homepage Corporation and incurs $5,000 of acquisition costs.
b.
Internet issues its $5 par value stock as consideration. The fair value of the stock at the acquisition date is $50 per share. Additionally, Internet incurs $5,000 of security issuance costs.

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Definitions:

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A psychological theory suggesting that emotional experiences arise from a combination of a state of physiological arousal and a cognitive interpretation of that arousal.

Cognitive Label

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