Which of the following is correct for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $27,500 cash in exchange for the building? Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $30 per share and the building's book value on the books of the seller was $275,000.

Stockholders' equity increases $272,500.

Total assets increase $272,500.

Total assets increase $300,000.

Stockholders' equity increases $275,000.