Abesu Corporation issues 100 common shares in exchange for land that is advertised for sale at a price of $125,000. Abesu Corporation's shares currently trade on the Toronto Stock Exchange for $1200 per share. In the journal entry to record issuing the shares, the value of the debits and credits should be: 1. $125 000, because the market value of the shares changes from one day to the next 2. $120 000, because the market value of the shares is known 3. More information is required to answer this question 4. None of the answers are correct 5. $125 000, because the market value of the land is more reliable than the value of the shares
Abesu Corporation issues 100 common shares in exchange for land that is advertised for sale at a price of $125,000. Abesu Corporation's shares currently trade on the Toronto Stock Exchange for $1200 per share. In the journal entry to record issuing the shares, the value of the debits and credits should be: 1. $125 000, because the market value of the shares changes from one day to the next 2. $120 000, because the market value of the shares is known 3. More information is required to answer this question 4. None of the answers are correct 5. $125 000, because the market value of the land is more reliable than the value of the shares
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Multiple Choice)
Abesu Corporation issues 100 common shares in exchange for land that is advertised for sale at a price of $125,000. Abesu Corporation's shares currently trade on the Toronto Stock Exchange for $1200 per share. In the journal entry to record issuing the shares, the value of the debits and credits should be:
1. $125 000, because the market value of the shares changes from one day to the next
2. $120 000, because the market value of the shares is known
3. More information is required to answer this question
4. None of the answers are correct
5. $125 000, because the market value of the land is more reliable than the value of the shares
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