Question

Cheyenne Corporation was organized on January 1, 2017. It is authorized to issue 9,500 shares of 8%, $100 par value preferred stock, and 516,800 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,020 shares of common stock for cash at $7 per share. Mar. 1 Issued 5,750 shares of preferred stock for cash at $111 per share. Apr. 1 Issued 24,660 shares of common stock for land. The asking price of the land was $91,520; the fair value of the land was $80,020. May 1 Issued 80,020 shares of common stock for cash at $9 per share. Aug. 1 Issued 9,500 shares of common stock to attorneys in payment of their bill of $49,100 for services rendered in helping the company organize. Sept. 1 Issued 9,500 shares of common stock for cash at $11 per share. Nov. 1 Issued 970 shares of preferred stock for cash at $115 per share. Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount

Answer 1

The shares issued in exchange for land are valued at the fair price of the land, and not the asking price. This is done according to generally accepted accounting principles