CAIRNE issued 30,000 shares of P100 statedvalue in exchange for land and factorybuilding with total fair value of P9 millionpesos. The value of land is twice as much thevalue of the building. What would be theentry of CAIRNE to record the transaction?Group of answer choicesA. LandBuilding6,000,0003,000,000Share Capital6,000,0003,000,000Share CapitalShare Premium9,000,000B. LandBuilding3,000,0006,000,000C. LandBuilding2,000,0001,000,000Share Capital2,000,0001,000,000Share Capital3,000,000D. LandBuilding3,000,000

It is given that total fair value of land and factory building is P9 million but buildings &…

CAIRNE issued 30,000 shares of P100 stated value in exchange for land and factory building with total fair value of P9 milion pesos. The value of land is twice as much the value of the building. What would be the entry of CAIRNE to record the transaction?

CAIRNE issued 30,000 shares of P100 stated value in exchange for land and factory building with total fair value of P9 milion pesos. The value of land is twice as much the value of the building. What would be the entry of CAIRNE to record the transaction?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hong Banjang was incorporated on January 1, 2020. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱400000.• A land and building were acquired through a lump sum payment of ₱80000. A mortgage amounting to ₱20000 was assumed on the land and building. • Total payments of ₱16000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱2000. • Additional capital of ₱40000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱12000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2020 is ₱24000.How much is the total assets as of December 31, 2020?
An entity acquired an investment in equity instrument for P800,000 on 31 March 2020. The direct acquisition costs incurred were P140,000. On 31 December 2020 the fair value of the instrument was P1,100,000 and the transaction costs that would be incurred on sale were estimated at P120,000. If the investment is designated as FA@FVTOCI, what gain would be recognized in the financial statements for the year ended 31 December 2020?
John Kim agrees to contribute equipment with a fair market value of $5,000 in exchange for 100 shares of Rio Inc.'s common stock with a par value of $1 per share. Rio will record this transaction as a credit to which of the following accounts? (Check all that apply.) Cash Common Stock Equipment Paid-in Capital in Excess of Land Paid-in Capital in Excess of Par Value
Chelm Music Corporation manufactures violins, violas, cellos, and fiddles and uses a job-order costing system. What account should Chelm debit when the president of the company has earned her salary? Group of answer choices Salaries and Wages Expense Salaries and Wages Receivable Work in Process Direct Labor Manufacturing Overhead
Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $38 per share and the bullding's book value on the books of the seller was $215,000. Which of the following is correct for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $21,500 cash in exchange for the butlding? Murtiple cholce Total assets Increase $380,000. Stockholders equity increases $215.000. Total assets increase $350.500. stocknoiders' equity increases $358.500.
Journey Company entered into agreement with its creditor to exchange its equity instrument and land in place of the financial liability with principal of P5,000,000 and accrued interest of P400,000. The terms of the exchange were 300,000 ordinary shares with P5 par value and P10 fair value. The land transfer has book value of P1,000,000 and fair value of P1,500,000. How much is the gain (or loss) from the extinguishment of the financial liability?
Johnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. (FV of $1, PV of $1, FVA of $1, FVAD of $1 and PVAD of$1) (Use appropriate factor(s) from the tables provided.) 1.On June 30, 2021, the Johnstone Company purchased equipment form Genovese Corp. Johnstone agreed to pay Genovese $20,000 on the purchase date and the balance in five annual installments of $8,000 on each June 30 beginning June 30, 2022. Assuming that an interest rate of 10% properly reflects the time value of money in this situation, at what amount should Johnstone value the equipment? 2.Johnstone needs to accumulate sufficient funds to pay a $5000,000 debt that comes due on December 31, 2026. The company will accumulate the funds by making five equal annual deposits to an account paying 9% interest compounded annually. Determine the required annual deposit if the first deposit is made on December 31, 2021. 3.On January 1, 2021, Johnstone leased…
Chico Company entered into a troubled debt restructuring agreement with Social Bank. The bank agreed to accept the land with a carrying amount of P800,000 and a fair value of P1,000,000 in exchange for a note payable with a carrying amount of P1,500,000. What is the gain on extinguishment of debt?
Sudoku Company issues 21,000 shares of $9 par value common stock in exchange for land and a building. The land is valued at $231,000 and the building at $377,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.
How much is the cost of investment? how much is the goodwill to be reported on January 31, 2022?
Exe. Ltd. purchased assets of the book value of Rs. 4,00,000 and took over theliabilities of Rs. 50,000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs. 3,80,000, be paid by issuing debentures of Rs. 100 each.What Journal entries will be made in the following three cases if debentures are issued.(a) at par(b) at a discount of 10%(c) at a premium of 10%?It was agreed that any fraction of debentures be paid in cash.
Belize Biltmore Plaza acquires a patent from Camino Real in exchange for 3,000 shares of Belize Biltmore Plaza’s $6 par value common stock and $85,000 cash. When the patent was initially issued to Camino Real, Belize Biltmore Plaza’s stock was selling at $8.25 per share. When Belize Biltmore Plaza acquired the patent, its stock was selling for $9.50 per share. Belize Biltmore should record the patent at what amount?