Asset versus stock acquisition. Barstow Company is contemplating the acquisition of the net assets of Crown Company for $875,000 cash. To complete the transaction, acquisition costs are $15,000. The...

Asset versus stock acquisition.

Barstow Company is contemplating the acquisition of the net assets of Crown Company for $875,000 cash. To complete the transaction, acquisition costs are $15,000. The balance sheet of Crown Company on the purchase date is as follows:

1. Record the acquisition of the net assets of Crown Company on Barstow Company’s books.

2. Record the sale of the net assets on the books of Crown Company.

3. Record the acquisition of 100% of the common stock of Crown Company on Barstow’s books. Crown Company will remain a separate legal entity.