n December 1 current year, the following accounts and their balances appeared in the ledger of the Latte Corp, a coffee processor Preferred 2% stock, $50 par ( 250,000 shares authorized, 80,000 share issued) $4,000,000 Pain in capital in excess of Par preferred stock 560,000 Common stock, $35 par ( 1,000,000 share authorized 400,000 share issued) 14,000,000 Pain in capital in excess of Par common stock 1,200,000 Retained Earnings 180,000,000 At the annual stockholders' meeting on March. 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $11,000,000. The plan provided (a) that the corporation borrow $4,000,000, (c) that a building valued at $3,375,000, and the land on which it is located, valued at $1,500,000, be acquired in accordance with preliminary negotiations by the issuance issued through an underwriter . The plan was approved by the shareholders and the accomplished by the following transactions: May. 11 Issued 125,000 shares of common stock in exchange for land and a building according to the plan. May. 20 Issued 40,000 shares of preferred stock , receiving $52 per share in cash. May. 31 Borrowed $4,000,000 from Laurel National , giving a 5% mortgage note. Required: Journalize the entries to record the May transaction.
On December 1 current year, the following accounts and their balances appeared in the ledger of the Latte Corp, a coffee processor
Preferred 2% stock, $50 par ( 250,000 shares authorized, 80,000 share issued) $4,000,000
Pain in capital in excess of Par
Common stock, $35 par ( 1,000,000 share authorized 400,000 share issued) 14,000,000
Pain in capital in excess of Par common stock 1,200,000
At the annual stockholders' meeting on March. 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $11,000,000. The plan provided (a) that the corporation borrow $4,000,000, (c) that a building valued at $3,375,000, and the land on which it is located, valued at $1,500,000, be acquired in accordance with preliminary negotiations by the issuance issued through an underwriter . The plan was approved by the shareholders and the accomplished by the following transactions:
May. 11 Issued 125,000 shares of common stock in exchange for land and a building according to the plan.
May. 20 Issued 40,000 shares of preferred stock , receiving $52 per share in cash.
May. 31 Borrowed $4,000,000 from Laurel National , giving a 5% mortgage note.
Required:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
