Question

27,000 shares reacquired by Blue Corporation for $48 per share were exchanged for undeveloped land that has an appraised value of $1,412,000. At the time of the exchange, the common stock was trading at $55 per share on an organized exchange.

(a) Prepare the journal entry to record the acquisition of land assuming that the purchase of the stock was originally recorded using the cost method. (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.)

Account Titles and Explanation	Debit	Credit
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	enter a credit amount

Answer 1

Solution:
			Cost of Purchae of Own Stock (27,000 Shares X $ 48)	$              1,296,000
			Land Appraised Value	$              1,412,000
			Market Value of Stocks at the time of Purchase (27,000 Shares X $ 55)	$              1,485,000
	Journal Entries
	Sr. No.	Date	Account Title and explanation	Debit	Credit
	1	-------	Land (27,000 Shares X $ 55)	$1,485,000
			Treasurry Stock (27,000 Shares X 48)		$1,296,000
			Paid in Capital in excess of Par - Treasurry Stock		$189,000
			(To record the Purchase of Land from exchange of Stock)