5.

HC Corporation issued 7,500 shares ofits $3 par value common stock at a market price of $20

per share to acquire all the outstanding common stock of Barry Corporation. HC paid $1,500 of

legal fees for this business combination and $3,300 for issuing the securities. Barry was merged

into HC and dissolved. Information for Barry Corporation immediately before the merger was as

follows:

Cash

Building

Patents

Total

Book value Fair value

2,000

30,000

Accounts payable

Common stock

2,000

25,000

7,000

34,000

5,000

32,000

5,000

2,000

Add. paid-in capital

10,000

Retained earnings

15,000

Total

32,000

Prepare the journal entries on HC Corporation's books to account for the business combination.