Acquisition of Land and Building for Stock and Cash
Valdilla’s Music Store acquired land and an old building in exchange for 50,000 shares of its common stock, par $0.50, and cash of $80,000. The auditor ascertains that the company’s stock was selling for $15 per share when the purchase was made. The following additional costs were incurred to complete the transaction:
Legal cost to complete transaction
Property tax for previous year
Cost of building demolition
Salvage value of demolished building
What entry should be made to record the acquisition of the property?