153k views
5 votes
On August 25, a privately owned company exchanged 10,000 shares of its private common stock for land. There is no readily available estimate of the stock’s fair value but the land has a current appraised value of $240,000. The seller originally bought the land for $200,000 two years ago. The journal entry the buyer records for acquisition of the land includes:______.A. A credit to common stock of $200,000.B. A credit to gain of $40,000.C. A debt to land for $240,000.D. All of these answer choices are correct.

1 Answer

4 votes

Answer:

C. A debit to land for $240,000.

Step-by-step explanation:

As it is mentioned that the value of the land has the appraised value of $240,000 also at the same time the common stock value could not be predicted

Therefore the land should be recorded at the current appraisal value i.e $240,000

Thus, the correct option is c. a debit to land for $240,000

The same is to be considered

User Sam Herrmann
by
7.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories