Answer:
Correct option is (d)
Explanation:
Owners contribute to capital in cash or kind in exchange for shares. Sometimes, owners contribute land or building to the organization in exchange for shares. Here, Jose Garcia contributes land worth $10,000 in exchange for 200 shares at $10 per share. Value of shares is $2,000 (200×10)
Journal entry to record the same:
Particulars Debit Credit
Land $10,000
Common stock $2,000
Paid in capital in excess $8,000
of par value
(To record land received in exchange
for shares)
Paid in capital in excess of par value of shares is credited which is $8,000 ($10,000 - $2,000).