Smith Company Exchanges Assets to Acquire a Building

question 87

Multiple Choice

Smith Company exchanges assets to acquire a building.The market price of the Smith stock on the exchange date was $35 per share and the building's book value on the books of the seller was $250,000. Which of the following journal entries is correct for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $20,000 cash in exchange for the building?

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Definitions:

Detent Spring

A spring mechanism that provides a resting position in mechanical devices, often used to hold a component in a specific position until enough force is applied to move it.

Main Box Ratio

Refers to the primary gear ratio in the gearbox of a vehicle, determining the relationship between engine speed and wheel speed, affecting acceleration and fuel efficiency.

Range Shift Condition

A specific state in a multi-speed transmission that allows the driver to switch between different sets of gear ratios or ranges for optimal performance.

Slave Valve Piston

A component within a hydraulic or pneumatic system that moves in response to the pressure changes transmitted by the master cylinder or valve.