A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $70,000.The entry to record this exchange is:
A)Debit Land $70,000;credit Common Stock $50,000;credit Paid-In Capital in Excess of Par Value,Common Stock $20,000.
B)Debit Land $70,000;credit Common Stock $70,000.
C)Debit Land $50,000;credit Common Stock $50,000.
D)Debit Common Stock $50,000;debit Paid-In Capital in Excess of Par Value,Common Stock $20,000;credit Land $70,000.
E)Debit Common Stock $70,000;credit Land $70,000.

Question

Quizplus · Accepted Answer

The transaction involves the issuance of 5,000 shares of $10 par value common stock (totaling $50,000) in exchange for land with a market value of $70,000. Therefore, the debit is to Land for $70,000, credit to Common Stock for $50,000 (for the par value), and credit to Paid-In Capital in Excess of Par Value, Common Stock for the remaining $20,000 ($70,000 - $50,000).

A Corporation Issued 5,000 Shares of $10 Par Value Common