On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor: Preferred 2% Stock, $50 par (250,000 shares authorized, 80,000 shares issued) .... Paid-In Capital in Excess of Par-Preferred Stock $ 4,000,000 560,000 Common Stock, $35 par (1,000,000 shares authorized, 400,000 shares issued)... 14,000,000 Paid-In Capital in Excess of Par-Common Stock. Retained Earnings..... 1,200,000 180,000,000 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. (Continued) The plan provided (a) 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 of 125,000 shares of common stock valued at $39 per share, (b) that 40,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,000,000. The plan was approved by the stockholders and 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. 20. Issued 40,000 shares of preferred stock, receiving $52 per share in cash. 31. Borrowed $4,000,000 from Laurel National, giving a 5% mortgage note. Instructions Journalize the entries to record the May transactions.
On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor: Preferred 2% Stock, $50 par (250,000 shares authorized, 80,000 shares issued) .... Paid-In Capital in Excess of Par-Preferred Stock $ 4,000,000 560,000 Common Stock, $35 par (1,000,000 shares authorized, 400,000 shares issued)... 14,000,000 Paid-In Capital in Excess of Par-Common Stock. Retained Earnings..... 1,200,000 180,000,000 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. (Continued) The plan provided (a) 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 of 125,000 shares of common stock valued at $39 per share, (b) that 40,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,000,000. The plan was approved by the stockholders and 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. 20. Issued 40,000 shares of preferred stock, receiving $52 per share in cash. 31. Borrowed $4,000,000 from Laurel National, giving a 5% mortgage note. Instructions Journalize the entries to record the May transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 1 of the current year, the following accounts and their balances appear in
the ledger of Latte Corp., a coffee processor:
Preferred 2% Stock, $50 par (250,000 shares authorized,
80,000 shares issued) ....
Paid-In Capital in Excess of Par-Preferred Stock
$ 4,000,000
560,000
Common Stock, $35 par (1,000,000 shares authorized,
400,000 shares issued)...
14,000,000
Paid-In Capital in Excess of Par-Common Stock.
Retained Earnings.....
1,200,000
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.
(Continued)
Transcribed Image Text:The plan provided (a) 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 of 125,000 shares of common stock valued at $39 per share, (b) that
40,000 shares of the unissued preferred stock be issued through an underwriter, and (c)
that the corporation borrow $4,000,000. The plan was approved by the stockholders and
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.
20. Issued 40,000 shares of preferred stock, receiving $52 per share in cash.
31. Borrowed $4,000,000 from Laurel National, giving a 5% mortgage note.
Instructions
Journalize the entries to record the May transactions.
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