Diamond Acquired Heart's Net Assets Fair Values on the Date of Acquisition:
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Essay

Diamond acquired Heart's net assets.At the time of the acquisition Heart's Balance sheet was as follows:
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$$\begin{array} { l r } \text { Accounts Receivable } & \$ 130,000 \\\text { Inventory } & 70,000 \\\text { Equipment, Net } & 50,000 \\\text { Building, Net } & 250,000 \\\text { Land } & \$ 100,000 \\\text { Total Assets } & \$ 600,000 \\& \\\text { Bonds Payable } & \$ 100,000 \\\text { Common Stock } & 50,000 \\\text { Retained Earnings } & 450,000 \\\text { Total Liabilities and Stockholders' Equity } & \$ 600,000 \\\end{array}$$ Fair values on the date of acquisition:
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$$\begin{array} { l r } \text { Inventory } & \$ 100,000 \\\text { Equipment } & 30,000 \\\text { B uilding } & 350,000 \\\text { Land } & 120,000 \\\text { B rand Name } & 50,000 \\\text { B onds payable } & 120,000 \\\text { Acquisition costs: } & \$ 5,000\end{array}$$ Required:
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Record the entry for the purchase of the net assets of Heart by Diamond at the following cash prices:
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a.$700,000
b.$300,000
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