Question

Novak Inc.’s $11 par value common stock is actively traded at a market price of $14 per share. Novak issues 5,700 shares to purchase land advertised for sale at $76,000. Journalize the issuance of the stock in acquiring the land.

Answer 1

Answer:

DR Land $79,800

CR Common stock $62,700

CR Paid-in capital in excess of par $17,100

(To record land purchased by stock issuance)

Working

Land

= $14 * 5,700

= $79,800

Common Stock

= $11 par value * 5,700

= $62,700

Paid-in capital in excess of par

= $79,800 - $62,700

= $17,100