On January 2,2013,Pilates Inc On January 2,2013,Spinning Anticipated Collecting $185,000 of the Recorded Accounts

Essay

On January 2,2013,Pilates Inc.paid $700,000 for all of the outstanding common stock of Spinning Company,and dissolved Spinning Company.The carrying values for Spinning Company's assets and liabilities are recorded below.
$\begin{array}{ll}\text { Cash } & \$ 200,000 \\\text { Accounts Receivable } & 220,000 \\\text { Copyrights (purchased) } & 400,000 \\\text { Goodwill } & 120,000 \\\text { Liabilities } & \$(180,000) \\\text { Net assets } & \$ 760,000\end{array}$ On January 2,2013,Spinning anticipated collecting $185,000 of the recorded Accounts Receivable.Pilates entered into the acquisition because Spinning had Copyrights that Pilates wished to own,and also unrecorded patents with a fair value of $100,000.
Required:
Calculate the amount of goodwill that will be recorded on Pilate's balance sheet as of the date of acquisition.Then record the journal entry Pilates would record on their books to record the acquisition.