Arnold Company was granted a charter that authorized the following capital stock:

Common stock: No-par, 100,000 shares. The no-par stock is not assigned a stated value per share.

Preferred stock: 8 percent, par $5, 20.000 shares.

During the first year, 2003, the following selected transactions occurred in the order given:

a. Sold 30.000 shares of the no-par common stock at $40 cash per share and 5,000 shares of the preferred stock at $26 cash per share.

b. Issued 2,000 shares of preferred stock as full payment for a plot of land. The stock was selling at S26.

c. Repurchased 3,000 shares of the no-par common stock sold earlier; paid cash. $38 per share.
Required: 1. Give the journal entries indicated for each of these transactions. 2. Explain the economic difference between acquiring an asset for cash compared with acquiring it by issuing stock. Is it "better" to acquire a new asset without having to give up another asset?