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Company A is about to acquire 100% of company B. Company B has identifiable net...

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Accounting

Company A is about to acquire 100% of company B. Company B has identifiable net assets with book and fair values of $300,000 and $500,000 respectively. As payment Company A will issue common stock with a fair value of $75,000.

How should the transaction be recorded if the acquisition is?

a) An acquisition of net assets?

b) An acquisition of Company Bs common stock and Company B remains a separate legal entity.

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