Lopez Company acquired Atlantic Transportation Co. for $1,300,000. The fair market values of the assets acquired were as follows. No liabilities were assumed.
Equipment ...........$500,000
Land ..............$150,000
Building ............$520,000
Franchise (10 year life) .......$30,000
Required:
a. Calculate the amount of goodwill acquired.
b. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.