When Common Stock Is Issued in Exchange for Land, the Land

question 5

True/False

When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued.

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Definitions:

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and equity of a parent company and its subsidiaries as if the group was a single entity.

Fair Market Value

The price that an asset would sell for on the open market between willing and knowledgeable parties.

Book Value

The net value of a company's assets as recorded on its balance sheet, calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.