Which of the Following Journal Entries Is Correct for Smith $\begin{array} { l r } \text { Building } & 220,000 \\\quad \text { Cash } && 20,000 \\\quad \text { Common stock } && 200,000\end{array}$

question 46

Multiple Choice

Which of the following journal entries is correct for Smith Company when Smith issues 10,000 shares of $20 par value common stock and pays $20,000 cash in exchange for 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 $200,000.

• A) \(\begin{array} { l r }
• \text { Building } & 220,000 \\
• \quad \text { Cash } && 20,000 \\
• \quad \text { Common stock } && 200,000
• \end{array}\)
• B) \(\begin{array} { l r }
• \text { Building } & 370,000 \\
• \quad \text { Cash } && 20,000 \\
• \text { Common Stock } & &350,000
• \end{array}\)
• C) \(\begin{array} { l r }
• \text { Building } & 370,000 \\
• \text { Cash } & 20,000 \\
• \text { Common stock } & 200,000 \\
• \text { Additional paid-in capital } & 150,000
• \end{array}\)
• D) \(\begin{array} { l l }
• \text { Building } & 200,000 \\
• \quad\quad\text { Common stock } &\quad\quad\quad 200,000
• \end{array}\)

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Definitions:

Extensor Carpi Ulnaris

A muscle in the forearm that extends and adducts the wrist, playing a key role in the movement of the hand and wrist.

Palmaris Longus

A muscle in the forearm that is associated with the flexion of the wrist and is absent in some individuals.

Gluteus Maximus

The largest and most superficial of the three gluteal muscles, involved in the movement of the hip and thigh.

Relative Size

A principle of perception that allows the determination of an object's size based on its perceived distance.