Answer:
See below
Explanation:
1. Journal entry
Land Dr $350,000
Building Dr $1,050,000
Machinery and equipment Dr $700,000
........................ To Common stock Cr $1,250,000
(12,500 × $100)
.......................To Paid in capital in excess of par Cr $850,000
($2,100,000 - $1,250,000)
Workings
Cost of plant is $168 × 12,500 = $2,100,000
2. Journal entry
Building Dr $266,000
($105,000 + $161,000)
Machinery and equipment Dr $135,000
Land improvements Dr $122,000
Land Dr $18,000
..............................................To Cash a/c Cr $541,000
3. Journal entry
Machinery and equipment Dr $255,500
..........................................To cash a/c Cr $255,500
Working
($10,500 + $245,000 which is 98% of $250,000)
