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Brief Exercise 10-07 Sarasota Company obtained land by issuing 3,400 shares of its $12 par value...

Brief Exercise 10-07 Sarasota Company obtained land by issuing 3,400 shares of its $12 par value common stock. The land was recently appraised at $147,720. The common stock is actively traded at $42 per share. Prepare the journal entry to record the acquisition of the land.

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Answer #1

· Since the appraised value of LAND is available to be $ 147,720, the issue value of common stock would be taken as $ 147,720 only.

· Journal entry

Accounts title

Debit

Credit

Land

$147,720

     Common Stock (3400 shares x $ 12 par value)

$47,600

       Paid in Capital in excess of Par - Common Stock ($147720 - 47600)

$100,120

(to record purchase of Land by issuance of Stock)

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