Exchanged a land with an adjusted basis of 65,000 for 5,000 shares of corporation stock and 10,000 cash the corporation stock had a fmv of 80,000 on the date

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Social Studies

Paxton Avila

19 September, 03:51

Exchanged a land with an adjusted basis of 65,000 for 5,000 shares of corporation stock and 10,000 cash the corporation stock had a fmv of 80,000 on the date

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Lucy · Answer 1

Sr. No Particulars Debit Credit

Land $ 65000

Profit & Loss Account $ 25,000

Corporation Stock $ 80,000

Cash $ 10,000

Explanation:

Recording of purchase of land for stock of $ 80,000 and cash $ 10,000. As the value of land is $ 65,000 the loss is debited to the profit and loss account. the stock is recorded at the fair market value on the date.