1. On August 15, 2013, DCH acquired Sparky Inc. paying $7,400,000 cash. The book values and fair values of Sparkys' assets and liabilities are listed below:
Accounts receivable
Book Value: $1,080,000
Fair Value: $ 975,000
Inventories
Book Value: 1,620,000
Fair Value: 2,400,000
Property, plant, and equipment
Book Value: 5,400,000
Fair Value: 6,975,000
Accounts payable
Book Value: 1,800,000
Fair Value: 1,800,000
Bonds payable
Book Value: 2,700,000
Fair Value: 2,475,000
Required:
Prepare the journal entry to record the acquisition by DCH.