A company purchases assets from another company for $10,000,000 in cash. The fair value of the tangible assets is $7,000,000.
Required
Prepare the journal entry to record the acquisition on the books of the acquirer, assuming
a. The acquisition qualifies for acquisition accounting.
b. The acquisition does not qualify for acquisition accounting.

Question

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The Answer of A company purchases assets from another company for $10,000,000 in cash. The fair value of the tangible assets is $7,000,000.
Required
Prepare the journal entry to record the acquisition on the books of the acquirer, assuming
a. The acquisition qualifies for acquisition accounting.
b. The acquisition does not qualify for acquisition accounting.

A Company Purchases Assets from Another Company for $10,000,000 in Cash