2. TheHarris Corporation acquired a building and land by issuing 25,000shares of $1 par...2....

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Accounting

2. TheHarris Corporation acquired a building and land by issuing 25,000shares of $1 par common stock. At that time, the stock was sellingfor $12 per share on the New York Stock Exchange. The independentlyappraised values of the building and the land were $250,000 and$150,000 respectively.
Prepare the journal entry forthe acquisition of the building and land.
(Use 3 decimalpoints for allocation calculations)

Answer & Explanation Solved by verified expert

4.4 Ratings (738 Votes)

WN:

Cost of the land and building is calculated as follows:

The appraised value of the land is $150000

The appriased value of the building is $250000.

Cost of Land =$150000/$400000*(25000*12)

=$112500

Cost of building =$250000/$400000*(25000*12)

=$187500

The following is the Journal Entry to record these

In the Books Of Harris Corporation

Journal Entry

SNno Account Title Dr Amount Cr Amount

1 land $112500

Buidling $187500

To Common Stock (25000 Shares $1 par) $25000

To Additional Paid in Capital on common $275000

stock

(25000 shares *$11)

to record the investment in Land and Building

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In: Accounting2. TheHarris Corporation acquired a building and land by issuing 25,000shares of $1 par...2. TheHarris Corporation acquired a building and land by issuing 25,000shares of $1 par common stock. At that time, the stock was sellingfor $12 per share on the New York Stock Exchange. The independentlyappraised values of the building and the land were $250,000 and$150,000 respectively.Prepare the journal entry forthe acquisition of the building and land.(Use 3 decimalpoints for allocation calculations)