Sherm & Co. issued 12,100, $1 par value common shares for $91,000 on June 3, 2018. 

Required

a) Write the journal entry to record the transaction. Date Account Title and Explanation Debit Credit Corporations: Stock and Dividends Chapter 15 601 

b) In addition to stock issued for cash, on June 3, 2018, Sherm & Co. issued an additional 13,600 common shares in exchange for machinery and a truck. The machinery was valued at $61,000 and the truck was valued at $101,000. The company could not readily determine the fair value of the shares. Record the transaction. Date Account Title and Explanation Debit Credit 

c) The accountant that handled the issue of stock for Sherm & Co. has sent a bill for $5,600. The accountant has agreed to accept 550 common shares instead of cash. The company could not readily determine the fair value of the shares. Record the transaction on June 9, 2018. Date Account Title and Explanation Debit Credit Analysis In the case of non-monetary exchanges, in which assets or services are exchanged for issued stock, a corporation can choose to evaluate the fair value of stock issued with two options. 

Option 1: Fair value of assets or services received 

Option 2: Fair value of the stock issued Think of a scenario when option 2 is preferred by accountants over option 1 and explain why?

Answer rating: 100% (QA)

Answer Date GL Name Debit Credit June 3 2018 Cash Ac Dr 91000 Share ... View the full answer