Martin Corporation is planning to issue 3,000 shares of its own

$10 par value ordinary shares for two acres of land to be used as a building site.

Instructions

(a) What general rule should be applied to determine the amount at which the land should be recorded?

(b) Under what circumstances should this transaction be recorded at the fair value of the land?

(c) Under what circumstances should this transaction be recorded at the fair value of the shares issued?

(d) Assume Martin intentionally records this transaction at an amount greater than the fair value of the land and the shares. Discuss this situation.