A company acquires land by issuing 10,000 shares of its $10 par value common stock currently trading at $20 per share and the appraised value of the land is $250,000. We would record the land by
a. Using its appraised value of $250,000 and recognize a gain of $50,000 since we are issuing stock only currently worth $200,000.
b. Record the land at the value of the consideration given up, $200,000.
c. Record the land at the average of its appraised value of $250,000 and the $200,000 value of the stock issued, thereby recognizing a $25,000 gain.
d. Record the land at the par value of the stock given up, $100,000.