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8 November, 17:33

Exchanged a land with an adjusted basis of 65,000 for 5,000 shares of corporation stock and 10,000 cash the corporation stock had a fmv of 80,000 on the date

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  1. 8 November, 17:59
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    Sr. No Particulars Debit Credit

    Land $ 65000

    Profit & Loss Account $ 25,000

    Corporation Stock $ 80,000

    Cash $ 10,000

    Explanation:

    Recording of purchase of land for stock of $ 80,000 and cash $ 10,000. As the value of land is $ 65,000 the loss is debited to the profit and loss account. the stock is recorded at the fair market value on the date.
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