2. A corporation issued 5,000 shares of its common stock (par value of $5 per share) to a vendor for machinery. The sale agreement listed the agreed upon price of the common stock as $23 per share. The costs related to issuing the stock were $1,500. On the date of issue the market value (as evidence by trades on the regional stock exchange) was $41 per share. The company bookkeeper prepared the following entry for this transaction: The controller's rationale for this treatment was that the discount was given as an inducement to continue current business relations. There is, however, no agreement binding on the vendor to continue doing business with the company. The Deferred Stock Issue Costs will be amortized over the useful life of the machinery 6 years. Required: Is this method of handling the transaction in accordance with GAAP? Explain