Ask Question
10 December, 22:43

A corporation issued 5,900 shares of $10 par value common stock in exchange for some land with a market value of $88,000. The entry to record this exchange is:

a. Debit Land $88,000; credit Common Stock $88,000.

b. Debit Land $59,000; credit Common Stock $59,000.

c. Debit Common Stock $59,000; debit Paid-In Capital in Excess of Par Value, Common Stock $29,000; credit Land $88,000.

d. Debit Land $88,000; credit Common Stock $59,000; credit Paid-In Capital in Excess of Par Value, Common Stock $29,000.

e. Debit Common Stock $88,000; credit Land $88,000.

+3
Answers (1)
  1. 10 December, 23:23
    0
    The correct answer is option (d) Debit Land $88,000; credit Common Stock $59,000; credit Paid-In Capital in Excess of Par Value, Common Stock $29,000.

    Explanation:

    Solution

    Given that:

    Since the fair value of the Land is more readily known,

    Then,

    The Fair Market value of Land $88,000 will be taken as basis for valuation.

    So entry will be:

    Land Dr $88,000

    Common Stock Cr $ 59,000

    Paid in Capital in Excess of Par - Common Stock Cr 29,000

    So a option is correct
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A corporation issued 5,900 shares of $10 par value common stock in exchange for some land with a market value of $88,000. The entry to ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers