Final answer:
The correct entry for the issuance of 17,000 shares of $8 par value common stock in exchange for land and a building would debit Land for $236,000, debit Building for $375,000, and credit Common Stock for $136,000.
Step-by-step explanation:
The student's question pertains to recording the issue of shares in exchange for land and a building. When a company issues common stock, the par value of the stock is multiplied by the number of shares issued to determine the total credit to the Common Stock account. In this case, 17,000 shares of $8 par value common stock are issued, which means the Common Stock account will be credited by $136,000 (17,000 shares x $8 per share).
The remaining value is divided between the Land and the Building accounts based on their given values, $236,000 for the land and $375,000 for the building. The journal entry to record this transaction would be:
- Debit Land for $236,000
- Debit Building for $375,000
- Credit Common Stock for $136,000
The correct choice from the options given would be option (a): Land, $236,000; Building, $375,000; Common Stock, $136,000.