Jackson Company is a publicly held corporation whose $1 par value stock is actively traded at $64 per share. The company issued 3000 shares of stock to acquire land recently advertised at $200000. When recording this transaction Barton Company will

Question

Quizplus · Accepted Answer

When a company issues stock for non-cash assets such as land, the transaction records the asset acquired, not the price advertised. Therefore, Jackson Company will debit Land for $200,000, and credit Common Stock for the fair market value of the stock issued, which is 3000 x $64 = $192,000. The difference between the Land value and the Common Stock value is recorded as a debit or credit to Additional Paid-In Capital, but none of the choices in the question reflect this option. Choice C is the correct answer because it correctly records the asset acquired.

Jackson Company Is a Publicly Held Corporation Whose $1 Par