The Financial Statements for Jode Inc

question 26

Essay

The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2020, follow. Lakely's buildings were undervalued on its financial records by $60,000.
On December 31, 2020, Jode issued 54,000 new shares of its $10 par value stock in exchange for all the outstanding shares of Lakely. Jode's shares had a fair value on that date of $35 per share. Jode paid $34,000 to an investment bank for assisting in the arrangements. Jode also paid $24,000 in stock issuance costs to effect the acquisition of Lakely. Lakely will retain its incorporation.Prepare the journal entries to record: (1)the issuance of stock by Jode; and (2)the payment of the combination costs.

---

Definitions:

Postorder Processing

A type of process often used in algorithms and data structure operations that involves visiting a node after its descendants in a tree.

Left Subtree

In binary tree structures, it refers to the subtree that is rooted at the left child of a parent node.

Right Subtree

The portion of a binary tree that is located to the right of a node.

Shallow Copy

A shallow copy of an object copies the 'outer' structure of the object, but not the inner objects; the copied object still references the same inner objects as the original.