Homework Answers
Answer:
| Date | Account names | Debit | credit |
| Nov 25 | Land A/c Dr. | $ 270,000 | |
| To common stock | $ 50,000 | ||
| To additional paid in capital | $ 220,000 | ||
| ( 40,000 shares of $ 1.25 par value exchanged for land with a fair value of $270,000 ) |
Computations :
Fair value of land = $ 270,000
Value of Common stock = $ 1.25 x 40,000 shares = $ 50,000
Additional paid in capital = $270,000 - $ 50,000 = $ 220,000
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