Hoover Company acquired Burgess Company for $1,200,000 cash. The fair value of Burgess's assets was $1,040,000, and the company had liabilities of $60,000. Which of the following journal entries would be used to record the purchase of Burgess Company?
A.
| Burgess assets | 1,040,000 | |
| Goodwill | 160,000 | |
| Cash | 1,200,000 |
B.
| Burgess assets | 1,040,000 | |
| Goodwill | 220,000 | |
| Cash | 1,200,000 | |
| Burgess liabilities | 60,000 |
C.
| Burgess assets | 1,040,000 | |
| Burgess liabilities | 60,000 | |
| Goodwill | 100,000 | |
| Cash | 1,200,000 |
D.
| Burgess assets | 1,200,000 | |
| Cash | 1,200,000 |
Answer: B
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