This question seems to be simple, but I am still not clear.
on 8/31/Y1, W issued 100k shares of $20 par value common stock for the net assets of P in a business combination accounted by acquisition method. The market value of W's common stock on 8/31 was $36 per share. W paid a consulting fee of $160k for the acquisition. Cost of registering/issuing equity amounted to $80k. No goodwill was involved. what amount should Wood capitalize as the cost of acquiring P's net assets?
The answer is 3600k.
I know the 160k shall be expensed. But how about the 80k? it needs to be netted against proceeds from equity, right? The answer says 80k should be treated as a reduction of API capital. BUt I don't see how that is incorporated to the 3600k