When stock is exchanged for non-cash assets:

Name: When stock is exchanged for non-cash assets:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When stock is exchanged for non-cash assets, the assets should be recorded at their market value. Common stock should be recorded at par value, and any additional amount received should be recorded as paid-in capital in excess of par. Therefore, the appropriate journal entry is to debit assets for market value and credit Common Stock for par value and, if needed, Paid-in Capital in Excess of Par.

When Stock Is Exchanged for Non-Cash Assets