Sudoku Company issues 27,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $233,000 and the building at $371,000.

Prepare the journal entry to record issuance of the stock in exchange for the land and building.

Question

Business

Lucian Schultz

13 June, 00:45

Sudoku Company issues 27,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $233,000 and the building at $371,000.

Prepare the journal entry to record issuance of the stock in exchange for the land and building.

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Ann · Answer 1

Debit land with $233,000

Debit building with $371,000

Credit common stock with $216,000

Credit premium on common stock with $388,000

Explanation:

Value of share = 27,000 * $8 = 216,000

Total value of a land and a building = $233,000 + $371,000 = $604,000

Share premium = $604,000 - 216,000 = $388,000

The journal entries will be as follows:

Details Dr ($) Cr ($)

Land 233,000

Building 371,000

Common stock 216,000

Premium on common stock 388,000

Being the issue of common stock at a premium in exchange for a land and a building

Sudoku Company issues 27,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $233,000 and the building at $371,000.Prepare the journal entry to record issuance of the stock in exchange for the land and building.

Sudoku Company issues 27,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $233,000 and the building at $371,000.

Prepare the journal entry to record issuance of the stock in exchange for the land and building.