### Accounting Example: Issuing Common Stock in Exchange for Land and Building#### Example ScenarioSudoku Company issues 17,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $238,000 and the building at $380,000. Below is the journal entry to record the issuance of the stock in exchange for the land and building.#### Journal Entry Worksheet**Instruction:** Record the issue of 17,000 shares of $7 par value common stock in exchange for land valued at $238,000 and a building valued at $380,000.**Note:** Enter debits before credits.| Transaction | General Journal | Debit | Credit ||-------------|-------------------------------------------------|----------|----------|| 1 | Land | $238,000 | || 1 | Building | $380,000 | || 1 | Common Stock (17,000 shares * $7 par value) | | $119,000 || 1 | Additional Paid-in Capital (difference) | | $499,000 |**Explanation of Balances:**1. **Land**: Debit of $238,000 to reflect the inclusion of land in the company's assets.2. **Building**: Debit of $380,000 to reflect the inclusion of a building in the company's assets.3. **Common Stock**: Credit of $119,000 (calculation: 17,000 shares * $7 par value) to reflect the par value of the stock issued.4. **Additional Paid-In Capital**: Credit of $499,000 to account for the amount received over the par value ($238,000 for land + $380,000 for building - $119,000 par value of stock issued).#### Interactive Actions:- **Record entry**: Button to confirm and record the journal entry.- **Clear entry**: Button to clear all fields and reset the journal entry worksheet.- **View general journal**: Option to view this and other entries in the general journal.This example illustrates how Sudoku Company correctly accounts for the exchange of stock for tangible assets, ensuring that all relevant figures are accurately reflected in the company's financial records.

A journal entry is a core and foremost record that a transaction has taken place in the business.…

Sudoku Company issues 17,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $238,000 and the building at $380,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.

Sudoku Company issues 17,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $238,000 and the building at $380,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.

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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