On February 1, 2021, the Xilon Corporation issued 50,000 shares of its no-par common stock in exchange

Question:

On February 1, 2021, the Xilon Corporation issued 50,000 shares of its no-par common stock in exchange for five acres of land located in the city of Monrovia. On the date of the acquisition, Xilon’s common stock had a fair value of $18 per share. An office building was constructed on the site by an independent contractor. The building was completed on November 2, 2021, at a cost of $6,000,000. Xilon paid $4,000,000 in cash and the remainder was paid by the city of Monrovia.

Required:
1. Prepare the journal entries to record the acquisition of the land and the building.
2. Assuming that Xilon prepares its financial statements according to International Financial Reporting Standards, explain the alternatives the company has for recording the acquisition of the office building.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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