Midland Telecom provides communication services for Iowa, Nebraska, the Dakotas, and Montana. Midland purchased goodwill as part of the acquisition of Shipley Wireless Company, which had the following figures:
Book value of assets.................. $ 750,000
Market value of assets................ 1,000,000
Liabilities............................... 30,000
1. Journalize the entry to record Midland's purchase of Shipey Wireless for $320,000 cash plus a $480,000 note payable.
2. What special asset does Midland's acquisition of Shipey Wireless identify? How should Midland Telecom account for this asset after acquiring Shipey Wireless? Explain in detail.