How is the balance sheet adjusted when an LBO closes?

• Add the purchase price to cash on the asset side, funded by the new debt, with no other adjustments
• Zero out both sides of the balance sheet and rebuild it from the sponsor's equity contribution alone
• Wipe out old equity, add the new debt, create goodwill, write up assets, and capitalize financing fees
• Book the full purchase price as revenue in the opening period and let it flow through to retained earnings
• Keep the existing capital structure and equity unchanged, since the operating business is what was acquired, not the balance sheet