Assume that 2,000 shares of common stock with a par value of $12 and a market...

Assume that 2,000 shares of common stock with a par value of $12 and a market price of $16 per share are issued in exchange for land with a fair market value of $32,000.
a. Prepare the journal entry to record the transaction.
b. If the land's appraised fair market value were $33,000, what would be the correct entry to record
the transaction?
c. Prepare the necessary journal entry, assuming the same facts as in (b), except that the stock is not actively traded and therefore its market price is unknown.
d. Prepare the necessary journal entry, assuming the stock has a par value of $10 and a market price of $15 per share.

Expert Solution

a]	Land	$ 32,000
	Paid in capital in excess of par-Common stock		$ 8,000
	Common stock. $12 par		$ 24,000
b]	Land	$ 32,000
	Paid in capital in excess of par-Common stock		$ 8,000
	Common stock. $12 par		$ 24,000
c]	Land	$ 33,000
	Paid in capital in excess of par-Common stock		$ 9,000
	Common stock. $12 par		$ 24,000
d]	Land	$ 30,000
	Paid in capital in excess of par-Common stock		$ 10,000
	Common stock. $10 par		$ 20,000

ekkarill92 answered 2 years ago

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