Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share.The company issued 3,000 shares of stock to acquire land recently advertised at $100,000.When recording this transaction, Barton Company will

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When a company issues stock as payment for assets or services, the value of the stock issued is recorded at its fair market value, not at its par value. In this case, the fair market value of the land is $100,000, but the par value of the 3,000 shares issued is only $3,000 ($1 par value x 3,000 shares). Therefore, the company will debit Land for $100,000 and credit Common Stock for $3,000 (3,000 shares x $1 par value). The remaining $97,000 is recorded as an increase to additional paid-in capital, which is a component of stockholders' equity, by debiting additional paid-in capital for $97,000, so the answer is neither A, B, nor D. The correct answer is C, which recognizes the full value of the land acquired in the land account.

Barton Company Is a Publicly Held Corporation Whose $1 Par