dissenting: I dissent from the views expressed in the majority opinion. If the corporation had paid out $11,000 in cash in consideration of these stockholders guaranteeing payment of its bonds, I agree that it should be allowed to amortize such amount over the life of the bonds. But it did not pay out cash, but issued its stock in payment of such guaranty and it is my opinion that in issuing its stock, it has nothing to amortize.
In the instant case, when the Liberty Farms Company parted with 710 shares of its capital stock of the par value of $100 per share, it parted with no property. It still remained the owner of all the corporation’s property just as it was prior to the issuance of the stock. The only difference in the situation was that whatever equity there was in the owners of common, stock before the new stock was issued was divided among 950 shares, whereas, after the issuance of such stock this equity was divided among 1,660 shares. I fail to see where the corporation has anything which it may amortize as a result of the transaction.
Sternhagen agrees with this dissent.