Suppose Big K purchased 8,000 shares (100 percent of shares outstanding) of Little K
paying $10,000 in cash and issuing (and distributing to Little K’s shareholders) 5,000
shares with par value of $1 and total market value of $41,200.
The fair value of Little K’s identifiable assets/liabilities are as follows:
Long-term Notes Payable 17,000
What’s the amount of goodwill Big K should recognize?
What’s the journal entry?