Bargain Purchase Bower Company purchased Lark Corporation’s net assets on January 3, 20X2

Bargain Purchase Bower Company purchased Lark Corporation’s net assets on January 3, 20X2

Bargain Purchase

Bower Company purchased Lark Corporation’s net assets on January 3, 20X2, for $625,000 cash. In addition, Bower incurred $5,000 of direct costs in consummating the combination. At the time of acquisition, Lark reported the following historical cost and current market data:

Balance Sheet Item	Book Value	Fair Value
Cash & Receivables	$ 50,000	$ 50,000
Inventory	100,000	150,000
Buildings & Equipment (net)	200,000	300,000
Patent	—	200,000
Total Assets	$350,000	$700,000
Accounts Payable	$ 30,000	$ 30,000
Common Stock	100,000
Additional Paid-In Capital	80,000
Retained Earnings	140,000
Total Liabilities & Equities	$350,000

Required

Give the journal entry or entries with which Bower recorded its acquisition of Lark’s net assets.