Item5 6.6points Return to question Item 5 On June 30, 2024, Sundown Company reported the following account balances: Receivables$ 78,700Current liabilities$ (11,600)Inventory72,000Long-term liabilities(62,500)Buildings (net)83,400Common stock(90,000)Equipment (net)30,000Retained earnings(100,000)Total assets$ 264,100Total liabilities and equities$ (264,100) On June 30, 2024, Pelcore Company paid $309,000 cash for all assets and liabilities of Sundown, which will cease to exist as a separate entity. In connection with the acquisition, Pelcore paid $12,200 in legal fees. Pelcore also agreed to pay $56,300 to the former owners of Sundown contingent on meeting certain revenue goals during 2025. Pelcore estimated the present value of its probability adjusted expected payment for the contingency at $20,500. In determining its offer, Pelcore noted the following pertaining to Sundown: It holds a building with a fair value $42,700 more than its book value. It has developed a database appraised at $22,800, although it is not recorded in its financial records. It has research and development activity in process with an appraised fair value of $37,900. However, the project has not yet reached technological feasibility, and the assets used in the activity have no alternative future use. Book values for the receivables, inventory, equipment, and liabilities approximate fair values. Required: Prepare Pelcore’s accounting entries to record the combination with Sundown. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.