(Solution Download) The Poonamalie Company paid 4 000 000 in cash to the shareholders

The Poonamalie Company paid $4,000,000 in cash to the shareholders of the Slys Company for all of Slys' outstanding shares. Attorneys' fees related to the combination were $175,000, paid in cash. A comparison of the book and fair values of Slys' assets and liabilities appears below:

Required
a. Prepare the journal entry made by Poonamalie to record the business combination as a statutory merger.
b. Prepare the journal entry made by Poonamalie to record the business combination as a stock acquisition.

 

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