Stock 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 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 a building, valued at $3,375,000, and the land on which it is located, valued at $1,500,000, be acquired in accordan
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) |
$ 4,000,000 |
|
Paid-In Capital in Excess of Par— |
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 |
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. 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
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Journalize the entries to record the May transactions.
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