Land appraised at $84,000 is purchased by issuing 1,000 shares of $10 par value common stock. The

Question:

Land appraised at $84,000 is purchased by issuing 1,000 shares of $10 common stock. The market price of the shares at the time of the exchange, based on active trading in the securities market, is $95 per share. Should the land be recorded at $10,000, $84,000, or $95,000? Explain.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...