Wonderland, Inc. purchased Cheshire Co. for $820,000. The market value of Cheshire's assets and liabilities at the time of purchase were $980,000 and $320,000 respectively. The journal entry to record this will include:
A) debit to Asset accounts for $980,000, credit to Gain on Investments $160,000 and credit to Cash $820,000.
B) debit to Investments for $820,000, credit to Cash $820,000.
C) debit to Investments for $980,000, credit to Cash $820,000 and credit to Gain on Investment $160,000.
D) debit to Asset accounts for $980,000, debit to Goodwill $160,000, credit to Liabilities $320,000 and credit to Cash $820,000.
D) debit to Asset accounts for $980,000, debit to Goodwill $160,000, credit to Liabilities $320,000 and credit to Cash $820,000.
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