Let's break down the solution step by step as requested: --- **Step 1: Determine the Total Value Received** **Explanation:** The company receives land and a building. Add the value of both to find the total value received. - Land: $45,000 - Building: $85,000 - Total value received = $45,000 + $85,000 = **$130,000** --- **Step 2: Determine the Journal Entry Amounts** **Explanation:** The company issues 7,000 shares of $7 par value stock. When issuing stock for assets, the assets are debited for their fair value, and the common stock is credited at par value. Any excess over par is credited to Paid-in Capital in Excess of Par. - Common Stock credited = 7,000 shares × $7 par = **$49,000** - Paid-in Capital in Excess of Par = Total value - Par value = $130,000 - $49,000 = **$81,000** --- **Step 3: Prepare the Journal Entry** **Explanation:** Record the receipt of the land and building (debits), and the issuance of common stock at par and excess (credits). **Journal Entry:** | Account | Debit | Credit | |-----------------------------------------------|----------|----------| | Land | $45,000 | | | Building | $85,000 | | | Common Stock (7,000 shares × $7) | | $49,000 | | Paid-in Capital in Excess of Par | | $81,000 | --- **Final Answer:** **Journal entry to record the issuance of 7,000 shares of $7 par value common stock in exchange for land ($45,000) and building ($85,000):** > **Debit Land $45,000** > **Debit Building $85,000** > **Credit Common Stock $49,000** > **Credit Paid-in Capital in Excess of Par $81,000**