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Unformatted text preview: per share, and it also gives a 10%, five-year note payable for $200,000 for the net assets of Seed Company. Pitt’s books record the Pitt/ Seed business combination on December 27, 2008, with the following journal entries: Investment in Seed Company (+A) 1,000 Common stock, $10 par (+SE) 400 Additional paid-in capital (+SE) 400 10% Note payable (+L) 200 To record issuance of 40,000 shares of $10 par common plus a $200,000, 10% note in a business combination with Seed Company. Cash (+A) 50 Net receivables (+A) 140 Inventories (+A) 250 Land (+A) 100 Buildings (+A) 500 Equipment (+A) 350 Patents (+A) 50 Accounts payable (+L) 60 Notes payable (+L) 135 Other liabilities (+L) 45 Investment in Seed Company (-A) 1,000 Gain from bargain purchase (Ga, +SE) 200 To assign the cost of Seed Company to identifiable assets acquired and liabilities assumed on the basis of their fair values....
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- Spring '10
- Economics, Generally Accepted Accounting Principles, Seed company