Smith Company Exchanges Assets to Acquire a Building

question 81

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:

Exhausted

describes a state of extreme tiredness or fatigue, often resulting from physical or mental activity.

Depleted

Reduced in quantity or exhausted; often used in context with natural resources.

Point Source

A single, identifiable source of pollution, such as a pipe or a drain, from which pollutants are discharged.

Pollution

The introduction of contaminants into the natural environment that cause adverse change to air, water, or soil.