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Calculate the cost of acquisition of the land

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Question: X Ltd, a listed company, acquired land from Y Ltd by issuing 100 000 new shares in the company to Y Ltd. X's shares were trading at $4.6 per share at the date of acquisition. $4000 legal costs were incurred for the issues of these new shares.

X Ltd also agreed to transfer 30 000 of the shares it holds in Z Ltd to Y Ltd. Z's shares were trading at $4.5 per share at the date of acquisition. These shares originally costed X Ltd $5 per share.

Required: Calculate the cost of acquisition of the land by X Ltd and prepare journal entries to record the acquisition.

Reference no: EM132765671

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