Question
In: Accounting
2. The Harris Corporation acquired a building and land by issuing 25,000 shares of $1 par...
| 2. The Harris Corporation acquired a building and land by issuing 25,000 shares of $1 par common stock. At that time, the stock was selling for $12 per share on the New York Stock Exchange. The independently appraised values of the building and the land were $250,000 and $150,000 respectively. | |||||||
| Prepare the journal entry for the acquisition of the building and land. | |||||||
| (Use 3 decimal points for allocation calculations) | |||||||
Solutions
Expert Solution
WN:
Cost of the land and building is calculated as follows:
The appraised value of the land is $150000
The appriased value of the building is $250000.
Cost of Land =$150000/$400000*(25000*12)
=$112500
Cost of building =$250000/$400000*(25000*12)
=$187500
The following is the Journal Entry to record these
In the Books Of Harris Corporation
Journal Entry
SNno Account Title Dr Amount Cr Amount
1 land $112500
Buidling $187500
To Common Stock (25000 Shares $1 par) $25000
To Additional Paid in Capital on common $275000
stock
(25000 shares *$11)
to record the investment in Land and Building
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