The balance sheets of Abdul Co. and Lana Co. on June 30, Year 2, just before the transaction described below, were as follows:

Abdul Lana
Receivables $ 129,000 $ 38,150
Inventory 78,500 9,950
Plant assets (net) 272,000 84,350
$ 479,500 $ 132,450
Current liabilities $ 83,500 $ 45,600
Long-term debt 112,250 58,100
Common shares 158,500 58,050
Retained earnings (deficit) 125,250 (29,300)
$ 479,500 $ 132,450
On June 30, Year 2, Abdul Co. purchased all of Lana Co. assets and assumed all of Lana Co. liabilities for $94,000 in cash. The carrying amounts of Lana’s net assets were equal to fair value except for the following:

Fair
Value
Inventory $11,850
Plant assets 88,100
Long-term debt 51,800
Required:

(a) Prepare the journal entries for Abdul Co. and for Lana Co. to record this transaction