On June 30,2011,Stampol Company Ceased Operations and All of Their

Essay

On June 30,2011,Stampol Company ceased operations and all of their assets and liabilities were purchased by Postoli Incorporated.Postoli paid $40,000 in cash to the owner of Stampol,and signed a five-year note payable to the owners of Stampol in the amount of $200,000.Their closing balance sheets as of June 30,2011 are shown below.In the purchase agreement,both parties noted that Inventory was undervalued on the books by $10,000,and Pistoli would also take possession of a customer list with a fair value of $18,000.Pistoli paid all legal costs of the acquisition,which amounted to $7,000.
Required:
1.Prepare the journal entry Postoli would record at the date of acquisition.
2.Prepare the journal entry Stampol would record at the date of acquisition.