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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

ekkarill92 answered 1 year ago
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