Putt Company issues 500 shares of $100 preferred stock to Drive Corporation in exchange for land on December 31. This land was carried on Drive’s books for $40,000.

Required:

1.	Prepare the journal entry to record the acquisition of the land for each of the following independent situations:
a.	The preferred stock is currently selling for $120 per share. No appraisal is available on the land.
b.	The land is appraised at $65,000. There have been no recent sales of the preferred stock.
c.	The preferred stock is currently selling for $125 per share. The land is appraised at $64,000.
2.	Next Level For Requirement 1(c), discuss why you chose the value used in the journal entry.

Answer rating: 100% (QA)

1 No Account Title Debit Credit a Land 40000 Discount Preferred stock diff ... View the full answer