(Issuance of Stock for Land) X Corporation is planning to issue 3,000 shares of its own $10 par value common stock for two acres of land to be used as a building site.

Answer the following questions:

What general rule should be applied to determine the amount at which the land should be recorded?

Under what circumstances should this transaction be recorded at the fair value of the land?

Under what circumstances should this transaction be recorded at the fair value of the stock issued?

Assume X intentionally records this transaction at an amount greater than the fair value of the land and the stock. Discuss this situation.