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Exercise 3-8 Peep Inc. acquired 100% of the outstanding common stock of Shy Inc. for $2,262,400...

Exercise 3-8

Peep Inc. acquired 100% of the outstanding common stock of Shy Inc. for $2,262,400 cash and 14,060 shares of its common stock ($2 par value). The stock’s market value was $39 on the acquisition date.

Prepare the journal entry to record the acquisition. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit
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Answer #1

Answer :

Journal entry to record acquisition :

Date Account title and explanation Debit Credit
Shy Inc $2,810,740
Cash $2,262,400
Common stock (14,060 × $2) $28,120
Additional paid in capital (14,060 × $37) $5,20,220
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