Internet Corporation is considering the acquisition of Homepage Corporation and has obtained the following audited condensed balance sheet:

Internet Corporation is considering the acquisition of Homepage Corporation and has obtained the following audited condensed balance sheet:

Assets

Current assets 40,000

Land 20,000

Buildings (net) 80,000

Equipment (net) 60,000

Total Assets 200,000

Liabilities and Equity

Current Liabilities 60,000

Capital Stock (50,000 shares, $1 par value) 50,000

Other Paid In Capital 20,000

Retained Earnings 70,000

Total Liabilities and Equity 200,000

Internet also acquired the following fair values for Homepage’s assets and liabilities:

Current Assets 55,000

Land 60,000

Buildings (net) 90,000

Land (net) 75,000

Current Liabilities (60,000)

Total 220,000

Internet and Homepage agree on a price of 280,000 for Homepage’s net assets.

Prepare the necessary journal entry to record the purchase given the following scenarios:

A. Internet pays cash for Homepage Corporation and incurs 5,000 of direct acquisition costs

B. Internet issues its $5 par value stock as consideration. The fair value of the stock at the acquisition date is $50 per share. Additionally, Internet incurs 5,000 of security insurance costs