Prepare the journal entry to record the business combination as a merger, in each of the following situations:

a. Plastic acquires steel for 250,000 cash. Other direct cash acquisition costs are20,000.

What is the journal entry to record the business combination as a merger in situation a?
1) Debit: Plastic (or Goodwill) $270,000; Credit: Cash $270,000
2) Debit: Plastic $250,000, Other direct cash acquisition costs $20,000; Credit: Cash $270,000
3) Debit: Plastic $270,000; Credit: Cash $270,000
4) Debit: Plastic $250,000; Credit: Cash $250,000