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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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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