JournaldrillStock issued for land
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Lumen Robotics Inc. acquires a parcel of land for a new plant by issuing 5,000 shares of its $1 par value common stock. The stock is actively traded and closed at $18 per share on the day of the exchange. Record the purchase.
What this exercise teaches
The land is recorded at the fair value of the shares given up, 5,000 x $18 = $90,000. Common Stock is credited at par, 5,000 x $1 = $5,000, and the remaining $85,000 goes to Paid-in Capital in Excess of Par, Common. No cash changes hands, and land is not depreciated.
A hint if you get stuck
A noncash stock issue is recorded at fair value, here the market price of the shares, and the par value still goes to Common Stock.
Try it now, free, no account needed
The first 15 tasks on Journaldrill are free. Open it on the practice page, solve it, and get instant feedback with a hint. A free account adds the worked solution; Pro adds timed mode and the certificate.
Open this exerciseMore exercises in Payroll, assets and equity
- Recording payrollPro
- Employer payroll taxesPro
- Selling equipment at a gainPro
- Selling equipment at a lossPro
- Issuing common stockPro
- Issuing preferred stockPro
- Buying treasury stockPro
- Declaring a cash dividendPro
- Small stock dividendPro
- Remitting payroll taxesPro
- Discarding equipment with no proceedsPro
- Reissuing treasury stock above costPro