A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:
A)A debit to Common Stock for $60,000.
B)A debit to Land for $60,000.
C)A credit to Land for $60,000.
D)A credit to Paid-in Capital in Excess of Par Value, Common Stock for $24,000.
E)A credit to Common Stock for $84,000.

Question

Quizplus · Accepted Answer

The entry would include a credit to Common Stock for the par value of the shares issued (6,000 shares x $10 = $60,000) and a credit to Paid-in Capital in Excess of Par Value, Common Stock for the difference between the market value of the land and the par value of the stock ($84,000 - $60,000 = $24,000).

A Corporation Issued 6,000 Shares of Its $10 Par Value