Question

The journal entry to record the acquisition of land and a building by issuing common stock

(A) debits​ Land, Building, and Common Stock.
(B) debits Land and Building and credits Common Stock.
(C) debits Land and credits Common Stock.
(D) debits Common Stock and credits Land and Building.

Answer 1

(B) debits Land and Building and credits Common Stock.

Step-by-step explanation:

As with the acquisition of land and building, there is an increase in asset called land and building and for this the land and building account will be debited.

Further, after this since the assets are acquired in exchange of common stock, there is issue of common stock, which shall be credited, as increase in common stock is credited.

Therefore, assets land and building will be debited and common stock will be credited.