Condensed balance sheets for Phillips Company and Solina Company on January 1, 2010, are as follows:

Condensed balance sheets for Phillips Company and Solina Company on January 1, 2010, areas follows:Phillips SolinaCurrent assets $180,000 $ 85,000Plant and equipment (net) 450,000 140,000Total assets $630,000 $225,000Total liabilities $ 95,000 $ 35,000Common stock, $10 par value 350,000 160,000Other contributed capital 125,000 53,000Retained earnings (deficit) 60,000 (23,000)Total liabilities and equities $630,000 $225,000On January 1, 2010, the stockholders of Phillips and Solina agreed to a consolidation.Because FASB requires that one party be recognized as the acquirer and the other as the acquiree,it was agreed that Phillips was acquiring Solina. Phillips agreed to issue 20,000 sharesof its $10 par stock to acquire all the net assets of Solina at a time when the fair value ofPhillips’ common stock was $15 per share.On the date of consolidation, the fair values of Solina’s current assets and liabilities wereequal to their book values. The fair value of plant and equipment was, however, $150,000.Phillips will incur $20,000 of direct acquisition costs and $6,000 in stock issue costs.Required:Prepare the journal entries on the books of Phillips to record the acquisition of Solina Company’snet assets.

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