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notsponge [240]
3 years ago
7

Sudoku Company issues 29,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $245

,000 and the building at $374,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.
Business
1 answer:
Alexeev081 [22]3 years ago
5 0

Answer:

The Journal entry is as follows:

Land A/c             Dr. $245,000

Building A/c       Dr. $374,000

To Common stock, $8 par value                                          $232,000

To Paid-in capital in excess of par value, common stock   $387,000

(To record issuance of the stock in exchange for the land and building)

Workings:

Common stock = $8 × 29,000 shares

                          = $232,000

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3 years ago
Ray Stokes is raising capital for a new company called NO Balloons Inc. NO Balloons will manufacture and sell festive balloons.
Sergeeva-Olga [200]

Answer:

NO Balloons' WACC = 7%

Explanation:

WACC = Weighted average cost of capital

The weighted average cost of capital (WACC) refers to calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including <u>common stock</u>, <u>preferred stock</u>, <u>bonds</u>, and <u>any other long-term debt</u>, are included in a WACC calculation.

<u>Respective calculation of WACC:</u>

<u>Step 1: Calculate the value of equity:</u>

Number of shares = 12 million

Share price = $19.5 per share

Value of equity = 12 million shares * 19.5/share = $234 million  (A)

<u>Step 2: Calculate the value of debt: </u>

Bonds = 200,000

Value of debt = 200,000 bonds * 1000 face value/bond * 89% sale price = 178 million  (B)

<u>Step 3: Calculate the firm value:  </u>

Total firm value (A+B) = 234 + 178 = 412 million

<u>Step 4: Calculate the weight of equity: </u>

Dividing the value of equity to total firm value:

Weight of equity = 234 / 412 = 0.5680

<u>Step 5: Calculate the weight of debt: </u>

Dividing the value of debt to total firm value

Weight of debt = 178 / 412 = 0.4320

<u>Step 6: Calculation of WACC :</u>

WACC = weight of equity * cost of equity + weight of debt * cost of debt = 0.5680 * 9.275% + 0.4320 * 4% = 7%

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Quizlet: Name three common types of checking account? basic checking account, interest-banking checking account, and Lifeline checking accounts.

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son4ous [18]

Answer:

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