Question

Sudoku Company issues 29,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $245,000 and the building at $374,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.

Answer 1

The Journal entry is as follows:

Land A/c Dr. $245,000

Building A/c Dr. $374,000

To Common stock, $8 par value $232,000

To Paid-in capital in excess of par value, common stock $387,000

(To record issuance of the stock in exchange for the land and building)

Workings:

Common stock = $8 × 29,000 shares

= $232,000