Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 13, Problem 13.5EX
To determine
Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.
Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.
Issue of common stock for non-cash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non-cash assets such as land, buildings, or equipment.
To Journalize: The issuance of the stock in acquiring the land.
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Issuing Stock for Assets Other Than Cash
On November 23, Elder Lift Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 26,000 shares of $10 par common stock with a current market price of $18.
Journalize the entry to record the transaction. If an amount box does not require an entry, leave it blank.
Issuing Stock for Assets Other Than Cash
On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 30,000 shares of $15 par common stock valued at $24 per share.
Journalize the entry to record the transaction. If an amount box does not require an entry, leave it blank.
Apr. 5
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On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 30,000 shares of $80 par common stock valued at $112 per share.
Journalize the entry to record the transaction. Refer to the Chart of Accounts for exact wording of account titles.
Chapter 13 Solutions
Accounting (Text Only)
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