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The correct journal entry for Barton Industries is ...

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Barton Industries recently received an almost new semi-truck and trailer valued at $165,200 in exchange for 4,130 shares of no-par common stock. Previously issued no-par common stock by Barton is currently trading in the open market for $30 per share. Which of the following would be the correct journal entry to record this transaction? Barton Industries
Entry Account Description Debit Credit
1 Vehicles (semi-truck & trailer) 165,200
Paid in Capital in Excess of No Par Value Common Stock 41,300
Common Stock no-par 123,900

2 Common Stock, no-par value 123,900
Vehicles (semi-truck & trailer) 123,900

3 Vehicles (semi-truck & trailer) 165,200
Common Stock, no-par value 165,200

4 Vehicles (semi-truck & trailer) 123,900
Discount on Common Stock 41,300
Common Stock, no-par value 165,200

A. Journal entry #1 is correct
B. Journal entry #3 is correct
C. Journal entry #4 is correct
D. Journal entry #2 is correct

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Solution Preview

The correct answer is 4.

The vehicle is 165,200
There has to be an adjusting transaction for the difference between the truck ...

Solution Summary

The solution provides the correct journal entry with explanation for the Barton Industries exercise.

$2.19