Internet Corporation Is Considering the Acquisition of Homepage Corporation and Has

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.