Accounting for intangibles Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Surety Wireless Company,...

Accounting for intangibles

Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Surety Wireless Company, which had the following figures:

Requirements

1. Journalize the entry to record Core’s purchase of Surety Wireless for $280,000 cash plus a $420,000 note payable.


2. What special asset does Core’s acquisition of Surety Wireless identify? How should Core Telecom account for this asset after acquiring Surety Wireless? Explain in detail.

Extracted text: Book value of assets Market value of assets Market value of liabilities $ 700,000 1,000,000 510,000