Stock transaction for corporate expansionPulsar Optics produces medical lasers for use in hospitals. The accounts and their balances appear in the ledger ofPulsar Optics on April 30 of the current year as follows:Preferred 1% Stock, $25 par (300,000 shares authorized, 130,000 shares issued)Paid-In Capital in Excess of Par-Preferred StockCommon Stock, $100 par (1,000,000 shares authorized, 280,000 shares issued)Paid-In Capital in Excess of Par-Common StockRetained EarningsAt the annual stockholders' meeting on August 5, the board of directors presented a plan for modernizing andexpanding plant operations at a cost of approximately $13,450,000. The plan provided (a) that the corporationborrow $3,100,000 (b) that $65,000 shares of the unissued preferred stock be issued through an underwriter, and(c) that a building, valued at 3,400,000 and the land on which it is located, valued at 5,000,000 be acquired inaccordance with preliminary negotiations by the issuance of 80,000. shares of common stock. The plan wasapproved by the stockholders and accomplished by the following transactions:Oct. 9. Borrowed $3,100,000 from St. Peter City Bank, giving a 4% mortgage note.Oct. 17. Issued 65,000 shares of preferred stock, receiving $30 per share in cash.Oct. 28. Issued 80,000 shares of common stock in exchange for land and a building, according to the plan.Required:Journalize the entries to record the October transactions.If an amount box does not require an entry, leave it blank.Oct. 9$3,250,000520,00028,000,0002,240,00056,000,000Oct. 17Oct. 28

Journal entries are recorded in a sequential manner in the journal. Entries are made based on the…

Oct. 9. Borrowed $3,100,000 from St. Peter City Bank, giving a 4% mortgage note. Oct. 17. Issued 65,000 shares of preferred stock, receiving $30 per share in cash. Oct. 28. Issued 80,000 shares of common stock in exchange for land and a building, according to the plan. Required: Journalize the entries to record the October transactions. If an amount box does not require an entry, leave it blank.

Oct. 9. Borrowed $3,100,000 from St. Peter City Bank, giving a 4% mortgage note. Oct. 17. Issued 65,000 shares of preferred stock, receiving $30 per share in cash. Oct. 28. Issued 80,000 shares of common stock in exchange for land and a building, according to the plan. Required: Journalize the entries to record the October transactions. If an amount box does not require an entry, leave it blank.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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