On December 2, 2014, Ewell Company Purchases a Piece of Land

question 5

Multiple Choice

On December 2, 2014, Ewell Company purchases a piece of land from the original owner. In payment for the land, Ewell Company issues 8,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $400,000. The journal entry to record this transaction would include which of the following items?

• A) Debit Common stock $8,000 and debit Paid-in capital $392,000.
• B) Credit Common stock $8,000 and credit Paid-in capital $392,000.
• C) Credit Common stock $400,000.
• D) Debit Cash $400,000.

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