On May 1, 2006, Regis Corporation acquired all the net assets of Wayland Company for $550,000 cash and a $500,000, 10% promissory note due May 1, 2011. The total interest of $250,000 also was due on May 1, 2008. The current fair rate of interest for the promissory note was 12%. The balance sheet of Wayland and the related current fair values of its identifiable assets and liabilities on the date of the business combination follow:
Legal fees of $24,430 incurred by Regis to effect the business combination were paid by Regis on May 1, 2006. The present value of 1 due in five years at 12% is 0.567427.
Prepare journal entries on May 1, 2006, to record Regis Corporation's acquisition of the net assets of Wayland Company. Disregard income taxes.

Question

On May 1, 2006, Regis Corporation acquired all the net assets of Wayland Company for $550,000 cash and a $500,000, 10% promissory note due May 1, 2011. The total interest of $250,000 also was due on May 1, 2008. The current fair rate of interest for the promissory note was 12%. The balance sheet of Wayland and the related current fair values of its identifiable assets and liabilities on the date of the business combination follow:
  Legal fees of $24,430 incurred by Regis to effect the business combination were paid by Regis on May 1, 2006. The present value of 1 due in five years at 12% is 0.567427.
Prepare journal entries on May 1, 2006, to record Regis Corporation's acquisition of the net assets of Wayland Company. Disregard income taxes.

Quizplus · Accepted Answer

The Answer of On May 1, 2006, Regis Corporation acquired all the net assets of Wayland Company for $550,000 cash and a $500,000, 10% promissory note due May 1, 2011. The total interest of $250,000 also was due on May 1, 2008. The current fair rate of interest for the promissory note was 12%. The balance sheet of Wayland and the related current fair values of its identifiable assets and liabilities on the date of the business combination follow:
  Legal fees of $24,430 incurred by Regis to effect the business combination were paid by Regis on May 1, 2006. The present value of 1 due in five years at 12% is 0.567427.
Prepare journal entries on May 1, 2006, to record Regis Corporation's acquisition of the net assets of Wayland Company. Disregard income taxes.

On May 1, 2006, Regis Corporation Acquired All the Net