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P Company acquired the assets and assumed the liabilities of S Company on January 1, 2013, for $510,000 when S Companys balance sheet was as follows:
| S COMPANY Balance Sheet January 1, 2013 |
| Cash | | $96,000 |
| Receivables | | 55,200 |
| Inventory | | 110,400 |
| Land | | 169,200 |
| Plant and equipment (net) | | 466,800 |
| Total | | $897,600 |
| | | |
| Accounts payable | | $44,400 |
| Bonds payable, 10%, due 12/31/2018, Par | | 480,000 |
| Common stock, $2 par value | | 120,000 |
| Retained earnings | | 253,200 |
| Total | | $897,600 |
Fair values of S Companys assets and liabilities were equal to their book values except for the following:
| 1. | | Inventory has a fair value of $126,000. |
| 2. | | Land has a fair value of $198,000. |
| 3. | | The bonds pay interest semiannually on June 30 and December 31. The current yield rate on bonds of similar risk is 8%. |
Prepare the journal entry on P Companys books to record the acquisition of the assets and assumption of the liabilities of S Company
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