Asked by Sarah Elizabeth on Jun 11, 2024
Verified
When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.
Par Value
The face value of a bond or stock as stated by the issuer, which bears importance in the legal capital of a company.
Land
A physical, immovable property asset, representing the earth's surface not including bodies of water or resources below the surface.
- Gain an insight into the accounting procedures for stocks with and without par value, including the treatment of stated value.
Verified Answer
SM
sandra mercardoJun 11, 2024
Final Answer :
False
Explanation :
When common stock is issued in exchange for land, the land should be recorded at the fair market value of the land or the fair market value of the stock issued, whichever is more clearly determinable.
Learning Objectives
- Gain an insight into the accounting procedures for stocks with and without par value, including the treatment of stated value.
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