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Prepare the journal entry to record the acquisition of land

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Problem - Issuance of Stock for Land Putt Company issues 500 shares of $100 preferred stock to Drive Corporation in exchange for land. This land was carried on Drive's books for $40,000.

Required -

1. Prepare the journal entry to record the acquisition of the land for each of the following independent situations:

a. The preferred stock is currently selling for $120 per share. No appraisal is available on the land.

b. The land is appraised at $65,000. There have been no recent sales of the preferred stock.

c. The preferred stock is currently selling for $125 per share. The land is appraised at $64,000.

2. For Requirement 1(c), discuss why you chose the value used in the journal entry.

Reference no: EM132889086

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