Question

Sudoku Company issues 19,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $240,000 and the building at $371,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.

Answer 1

Notes:

1) Par value is the legal capital per share and usually printed on the face of the stock certificate.

2) Capital in excess of par value is also known as premium on common stock or Additional Paid-In-Capital.

Journal Entry in the books of Sudoku Company

Date	Particulars	Debit ($)	Credit ($)
Not Given	Land Account	240,000
	Buildings Account	371,000
	Common Stock $7 par value Account		133,000
	Contributed Capital Account		478,000
	(Being 19000 shares of $7 par value common stock is exchanged for land and building. Excess value of land and building recorded over and above common stock par value is booked to contributed capital account)
	Total	611,000	611,000