As an auditor for the firm of Gratis and Goode, you encounter the following situations in auditing

Question:

As an auditor for the firm of Gratis and Goode, you encounter the following situations in auditing different clients.

1. JR SpA is a closely held corporation whose shares are not publicly traded. On December 5, the corporation acquired land by issuing 5,000 €10 par value ordinary shares. The owners’ asking price for the land was €138,000, and the fair value of the land was €124,000.

2. Novak A/S is a publicly held corporation whose ordinary shares are traded on the securities markets. On June 1, it acquired land by issuing 20,000 €10 par value ordinary shares. At the time of the exchange, the land was advertised for sale at €250,000. The shares were selling at €11 per share.

Instructions
Prepare the journal entries for each of the situations above.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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,...

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