Respuesta :
Answer:
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 ($)
Land 233,000
Building 371,000
Common stock 216,000
Premium on common stock 388,000
Being the issue of common stock at a premium in exchange for a land and a building
Journal entry
Particulars Dr ($) Cr ($)
Land 233,000
Building 371,000
Common stock 216,000
Premium on common stock 388,000
First, we need to compute the value of share.
Value of share
= 27,000 × $8
= $216,000
We will as get the total value of land and building.
Total value of a land and a building
= $233,000 + $371,000
= $604,000
Share premium
= $604,000 - 216,000
= $388,000
Hence, journal entry to record issuance of the stock in exchange for the land and building would be;
Particulars Dr ($) Cr ($)
Land 233,000
Building 371,000
Common stock 216,000
Premium on common stock 388,000
(Being the issuance of common stock at a premium in exchange for land and building)
