On December 2 2014 Ewell Company purchases a piece of land f

On December 2, 2014, Ewell Company purchases a piece of land from the original owner. In exchange for the land, Ewell Company issues 8,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $400,000. Provide the journal entry for this transaction.

Solution

Land 400000         Common stock 8000         Paid-in capital in excess of par 392000