(Accounting for Goodwill) On July 1, 2012, Gissel Corporation purchased Mills Company by paying $250,000 cash and issuing a $150,000 note payable. At July 1, 2012, the balance sheet of Mills Company was as follows.Cash$ 50,000Accounts payable$200,000Accounts receivable90,000Stockholders’ equity235,000Inventory100,000$435,000Land40,000Buildings (net)75,000Equipment (net)70,000Copyrights10,000$435,000The recorded amounts all approximate current values except for land (fair value of $80,000), inventory (fair value of $125,000), and copyrights (fair value of $15,000).Instructions(a) Prepare the July 1 entry for Gissel Corporation to record the purchase.(b) Prepare the December 31 entry for Gissel Corporation to record amortization of intangibles. The copyright has an estimated useful life of 4 years with a residual value of $3,000.
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