Evergreen Building, Inc. issued 2,000 shares of $14 par common stock in exchange for a truck with a current market value of $45,000. Which of the following is NOT part of the journal entry for this transaction?

Question

Quizplus · Accepted Answer

The correct journal entry for this transaction would include debiting equipment for $45,000 (the market value of the truck), crediting Common Stock for $28,000 (2,000 shares at $14 par value each), and crediting Paid-in Capital in Excess of Par-Common for $17,000 (the difference between the market value of the truck and the par value of the shares). Crediting Common Stock for $45,000 is incorrect because it does not account for the par value of the stock and the excess over par value.