Since the net assets are $21,630.30, and the stock to be issued to John Doe is $50,000 the difference, or $28,369.70, represents the amount paid for the goodwill of the business. The transaction is entered as follows:-- Property and Goodwill of the business of John Doe, transferred to this company as per resolution of the board of directors, Dec. 21st, 1908. Goodwill $28,369.70 Cash 2,264.00 Accounts receivable 4,650.50 Machinery 9,000.00 Manufactured goods 2,100.00 Material and supplies 3,780.00 Furniture and fixtures 700.00 Accounts payable $864.20 Capital stock 50,000.00 One half of the capital stock is thus accounted for. The balance is to be subscribed, and when subscribed the entries will be as explained in Art. 26, depending upon whether subscriptions are paid in full or in installments. =28. When Stock is Issued in Payment of Property and a Part of the Stock is to be Donated to the Company.= John Doe owns a valuable patent on an automobile attachment and desires to secure capital to carry on its manufacture. He interests Richard Roe and Henry Snow, who agree to assist him to form the National Manufacturing Company to take over his patent and manufacture the attachment. The company is incorporated with an authorized capitalization of $150,000. Roe and Snow agree that Doe shall receive $100,000 full paid stock for his patent, and to subscribe $25,000 each, payable in cash to be used for the purchase of the necessary machinery. John Doe, in turn, agrees to donate $50,000 of his stock to provide working capital. The entries are: Patents $100,000 Capital stock $100,000 Full paid stock issued to John Doe to pay for patents transferred to the Company by bill of sale dated Dec. 2, 1908. Subscriptions $50,000 Capital stock $50,000 Subscriptions to capital stock as follows:-- Richard Roe $25,000 Henry Snow 25,000 -------- Treasury stock 50,000 Working capital 50,000 Full paid stock donated by John Doe to provide working capital. When subscriptions are paid:-- Cash 50,000 Subscriptions 50,000 It is decided to sell $30,000 of the treasury stock at 50% of its face value, and subscriptions are received for this amount. Subscription to treasury stock 30,000 Treasury stock 30,000 Subscription account is debited and treasury stock credited for the full amount since this is the amount of full paid stock to be issued, regardless of the price at which it is sold. When this stock is paid for, the entry in the cash book on the debit side is: