Final answer:
When stock is exchanged for non-cash assets, the asset accounts are debited at their market value, offering a current and fair representation of the assets' worth. (option a)
Step-by-step explanation:
When stock is exchanged for assets other than cash, those asset accounts are debited at their market value. This practice ensures that the transaction reflects the true economic exchange between the parties and provides a fair and current value assessment of the assets acquired.
Market value is considered a fair representation of what the assets are worth at the time of the exchange. Unlike par value, which is a nominal value assigned to stock for accounting purposes, or historical cost, which reflects the original cost of the asset, the market value indicates what the assets could be sold for under current market conditions. The book value represents the value of the assets as per the accounting records, and it may not always reflect the current market values.