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Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?

Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?
Transcribed Image Text:Company Corporate Inc. issued common stock in exchange for land with an original cost of $1,500,000. The directors of the corporation feel as though they got a great deal, as they feel the land is worth a lot of money due to the current real estate trend in the area. An independent appraise has valued the land at $2,000,000 which represents its fair value. Which is the correct value to be included in the books for the stock issued?
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