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problem: “Prior to entering into the EPL Merger Agreement, Stone terminated its merger contract with Plains Exploration and Production Company [Plains] & Plains Acquisition Corp. [Plains Acquisition] on June 22, 2006. As required under the terms of the terminated merger contract among Stone, Plains and Plains gaining, Plains was entitled to a breakup fee of 43.5 million dollar, which was advanced by EPL to Plains on June 22, 2006.”

How should the execution fee be accounted for in each of the 3 companies?

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