As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.1. Monty Corp. is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 4,000 shares of its $20 par value common stock. The owners’ asking price for the land was $125,000, and the fair value of the land was $118,000.2. Wildhorse Co. is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 19,000 shares of its $8 par value stock. At the time of the exchange, the land was advertised for sale at $269,000. The stock was selling at $9 per share.Prepare the journal entries for each of the situations above.

Journal: Journal is the book of original entry. Journal consists of the day today financial…

Answered: Prepare the journal entries for each of…

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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As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.

1.		Monty Corp. is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 4,000 shares of its $20 par value common stock. The owners’ asking price for the land was $125,000, and the fair value of the land was $118,000.
2.		Wildhorse Co. is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 19,000 shares of its $8 par value stock. At the time of the exchange, the land was advertised for sale at $269,000. The stock was selling at $9 per share.

Prepare the journal entries for each of the situations above.

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