Question

Prepare the journal entry to record autumn company’s issuance of 63,000 shares of no-par value common stock assuming the shares:
a. sell for $29 cash per share.
b. are exchanged for land valued at $1,827,000.

Answer 1

The entry for this transaction would be this: 

Land                                1,827,000 

Ordinary shares                       1,827,000 

# 

The market value of the shares on this transaction does not affect the recording of this transaction. If the share has no par value, the stated value should be used. Stated value is a value assigned by the company to its stock for the purpose of accounting and it does not have any relation with the market value of the shares. Since stated value is not given in this problem, we should record the entire amount of the land exchanged in this transaction to the "Ordinary shares" account.