When an acquiror pays more than the book value for a company, the excess amount over the book value is called goodwill.
The acquiror can finance the deal through cash, debt, or equity. If the company finances the deal through cash, then cash will go down on the balance sheet. Assets will go up by the book value of the acquired assets, but if this book value is less than the price paid, then goodwill be required to make the balance sheet balance.
Similarly, if the acquiror finances the deal through debt or equity, then debt or shareholder’s equity will go up. The assets will go up by the book value of the acquired assets, but if this book value is less than the price paid, then goodwill be required to make the balance sheet balance.