eBook Short Exercise 12-7 (Algorithmic) Issuance of Stock for Noncash Assets Fuk

Question

eBook Short Exercise 12-7 (Algorithmic) Issuance of Stock for Noncash Assets Fukul Company issued 20,300 shares of its $1 par yalye cemmon steck in exchange for land that had a fair market value of $100,000. Hide Prepare the journal entries necessary to record the issuance of the stock for the land under each of these conditions: 1. The stock was selling for $7 per share on the day of the transaction. 2. Management attempted to place a value on the common stock but could not do so. If an amount box does not require an entry, leave it blank 1. Issued 20,300 shares of $1 par value common stock for land market value of common stock used to value transaction 2. Issued 20,300 shares of $1 par value common stock for land market value of land used to value transaction

Explanation / Answer

Journal Entries Accounts title and explanations Debit $ Credit $ Case-1 Land Account Dr. 142100       Common Stock Account (20,300 shares @1) 20300        Additional Paid in Capital (20,300 shares @6) 121800 Case-2 Land Account Dr. 100,000       Common Stock Account (20,300 shares @1) 20,300       Additional paid in capital 79,700

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