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22 January, 00:51

Arturo company pays $4,130,000 cash and issues 28,200 shares of its $2 par value common stock (fair value of $50 per share) for all of westmont's common stock in a merger, after which westmont will cease to exist as a separate entity. stock issue costs amount to $32,400 and arturo pays $49,800 for legal fees to complete the transaction.

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  1. 22 January, 03:06
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    investment on Westment 4,212,200 debit

    Cash 4,212,200 credit

    Explanation:

    For the investment, we should include all the cost necessary to acquire the shares:

    Total cost:

    stocks issued cost 32,400

    legal fees 49,800

    cash to acquire the shares 4,130,000

    TOTAL 4,212,200

    We will create the investment account for this total and credit the cash
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