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 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.