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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