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25. Help me selecting the right answer. Thank you

25. Help me selecting the right answer. Thank you

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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25. Help me selecting the right answer. Thank you

On June 30, 2024, Ericson, Inc. purchased land. In payment for the land, Ericson, Inc. issued 10,000 shares of common stock with a $10 par value. The land had been appraised at a market value of $117,000. The journal entry to record this transaction would be: 1. Option A: - Debit: Land $100,000 - Credit: Common Stock—$10 Par Value $100,000 2. Option B: - Debit: Land $117,000 - Credit: Common Stock—$10 Par Value $100,000 - Credit: Paid-In Capital in Excess of Par—Common $17,000 3. Option C: - Debit: Land $117,000 - Credit: Common Stock—$10 Par Value $117,000 4. Option D: - Debit: Land $137,000 - Credit: Common Stock—$10 Par Value $100,000 - Credit: Paid-In Capital in Excess of Par—Common $37,000 Explanation: The text describes a transaction where Ericson, Inc. issues shares to pay for land. The correct journal entry reflects both the par value of the stock issued and any additional value attributed to the stock over its par value, referred to as "Paid-In Capital in Excess of Par."
Transcribed Image Text:On June 30, 2024, Ericson, Inc. purchased land. In payment for the land, Ericson, Inc. issued 10,000 shares of common stock with a $10 par value. The land had been appraised at a market value of $117,000. The journal entry to record this transaction would be: 1. Option A: - Debit: Land $100,000 - Credit: Common Stock—$10 Par Value $100,000 2. Option B: - Debit: Land $117,000 - Credit: Common Stock—$10 Par Value $100,000 - Credit: Paid-In Capital in Excess of Par—Common $17,000 3. Option C: - Debit: Land $117,000 - Credit: Common Stock—$10 Par Value $117,000 4. Option D: - Debit: Land $137,000 - Credit: Common Stock—$10 Par Value $100,000 - Credit: Paid-In Capital in Excess of Par—Common $37,000 Explanation: The text describes a transaction where Ericson, Inc. issues shares to pay for land. The correct journal entry reflects both the par value of the stock issued and any additional value attributed to the stock over its par value, referred to as "Paid-In Capital in Excess of Par."
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