Acquisition of business when new set of books are opened

New set of books are opened

The following are the entries recorded by the purchasing company:

Note: If the purchase price exceeds the net assets, the excess amount is debited to Goodwill Account; and if the net assets exceeds the purchase price, the excess amount is credited to Capital Reserve.

Note: Any difference between the totals of debit and credit is debited to Goodwill Account or credited to Capital Reserve Account.