On January 1, July 1, and December 31, 2016, a condensed trial balance for Nelson Company showed the following debits and (credits):

01/01/16 07/01/16 12/31/16
Current Assets $200,000 $260,000 $340,000
Plant and Equipment (net) 500,000 510,000 510,000
Current Liabilities (50,000) (70,000) (60,000)
Long-Term Debt (100,000) (100,000) (100,000)
Common Stock (150,000) (150,000) (150,000)
Other Paid-in Capital (100,000) (100,000) (100,000)
Retained Earnings, January 1 (300,000) (300,000) (300,000)
Dividends Declared

10,000
Revenues
(400,000) (900,000)
Expenses
350,000 750,000

Assume that, on July 1, 2016, Systems Corporation purchased the net assets of Nelson Company for $750,000 in cash. On this date, the fair values for certain net assets were:

Current Assets $280,000
Plant and Equipment (remaining life of 10 years) 600,000

Nelson Company's books were NOT closed on June 30, 2016.

For all of 2016, Systems' revenues and expenses were $1,500,000 and $1,200,000, respectively.

Required:
(1) Record the entry on Systems' books for the July 1, 2016 purchase of Nelson.

1 .
Debit Credit

Current Assets 280,000

Plant and Equipment 600,000

Goodwill * 40,000

Current Liabilities
70,000

Long-Term Debt
100,000

Cash
750,000

* Goodwill is calculated as follows:
Acquisition price
$750,000
Fair value of acquired net assets:

Current assets $280,000

Plant and equipment 600,000

Current liabilities (70,000)

Long-term debt (100,000) 710,000
Goodwill
$ 40,000