Bluesy Company purchased land with a current market value of $240,000.Its book value in the accounts of the seller was $130,500.In exchange for the land,Bluesy issued 20,000 shares of its common stock,par $10,with an estimated market value of $14 per share.Bluesy stock is not traded on an established stock exchange.What amount should Bluesy record as the cost of the land?
A) $130,500
B) $200,000
C) $240,000
D) $280,000

Question

Quizplus · Accepted Answer

Bluesy should record the cost of the land at its current market value of $240,000, as the fair value of the land exchanged is the most reliable measure in this transaction.

Bluesy Company Purchased Land with a Current Market Value of $240,000.Its