Eight hundred shares of $22 par common stock were exchanged for a piece of equipment with a fair market value of $18,700. The journal entry to record the transaction would include a:

Question

Quizplus · Accepted Answer

The correct entry involves crediting Common Stock for the par value of the shares issued ($22 x 800 = $17,600) and crediting Paid-In Capital in Excess of Par Value-Common for the difference between the fair market value of the equipment ($18,700) and the par value of the shares ($17,600), which is $1,100.

Eight Hundred Shares of $22 Par Common Stock Were Exchanged