Question

Exercise 11-8 Your answer is partially correct. Try again. As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients. 1. LR Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 4,400 shares of its $19 par value common stock. The owners' asking price for the land was $132,700, and the fair value of the land was $118,700. 2. Vera Corporation is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 20,100 shares of its $11 par value stock. At the time of the exchange, the land was advertised for sale at $267,200. The stock was selling at $12 per share. Prepare the journal entry for each of the situations above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. Land 132,700 Common Stock 83,600 Paid-in Capital from Tre 49,100 2. Land Land Common Stock 221,100 Paid-in Capital from Treasi

Answer 1

No. 1 Account Titles and Explanation Debit Credit Land $1,18,700 || Common stock (4,400 X $19) (par value) || |$ 83,600 Additional paid in capital | $ 35,100 (To record purchase of land by issuing 4,400 share @ $19 each) $2,4 ,200 Land Common stock (20,100 x $11) (par value) | Additional paid in capital (20,100 X $1) || (To record purchase of land by issuing 20,100 share @ $12 each) $2,21,100 $ 20,100