The purchase of land for a combination of cash and issuance of shares would require which of the following entries?
A)Dr.Land, Cr.Common shares, Cr.Cash
B)Dr.Cash, Dr.Common shares, Cr.Land
C)Dr.Land, Cr.Cash, Dr.Common Shares
D)Dr.Cash, Cr.Land, Cr.Common shares

Question

Quizplus · Accepted Answer

The correct entry for purchasing land with a combination of cash and issuance of shares is to debit the Land account for the total value of the purchase (reflecting the increase in assets) and credit both the Cash and Common Shares accounts (reflecting the decrease in cash and increase in equity for the shares issued).

The Purchase of Land for a Combination of Cash and Issuance