Stock Transactions for Corporate Expansion 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, $25 par (500,000 shares authorized, 110,000 shares issued) $2,750,000 Paid-In Capital in Excess of Par-Preferred Stock 440,000 32,000,000 Common Stock, $100 par (1,000,000 shares authorized, 320,000 shares issued) Paid-In Capital in Excess of Par-Common Stock 2,560,000 64,000,000 Retained Earnings 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 $12,300,000. The plan provided (a) that a building, valued at $3,200,000, and the land on which it is located, valued at $4,700,000, be acquired in accordance with preliminary negotiations by the issuance of 75,000 shares of common stock, (b) that 60,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $2,600,000. The plan was approved by the stockholders and accomplished by the following transactions: May 11. Issued 75,000 shares of common stock in exchange for land and a building, according to the plan. Issued 60,000 shares of preferred stock, receiving $30 per share in cash. Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note. May 20. May 31. Required: Journalize the entries to record the foregoing transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. May 11. Issued 75,000 shares of common stock in exchange for land and a building, according to the plan. May 11 May 20. Issued 60,000 shares of preferred stock, receiving $30 per share in cash. May 20 May 31. Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note. May 31
Stock Transactions for Corporate Expansion 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, $25 par (500,000 shares authorized, 110,000 shares issued) $2,750,000 Paid-In Capital in Excess of Par-Preferred Stock 440,000 32,000,000 Common Stock, $100 par (1,000,000 shares authorized, 320,000 shares issued) Paid-In Capital in Excess of Par-Common Stock 2,560,000 64,000,000 Retained Earnings 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 $12,300,000. The plan provided (a) that a building, valued at $3,200,000, and the land on which it is located, valued at $4,700,000, be acquired in accordance with preliminary negotiations by the issuance of 75,000 shares of common stock, (b) that 60,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $2,600,000. The plan was approved by the stockholders and accomplished by the following transactions: May 11. Issued 75,000 shares of common stock in exchange for land and a building, according to the plan. Issued 60,000 shares of preferred stock, receiving $30 per share in cash. Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note. May 20. May 31. Required: Journalize the entries to record the foregoing transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. May 11. Issued 75,000 shares of common stock in exchange for land and a building, according to the plan. May 11 May 20. Issued 60,000 shares of preferred stock, receiving $30 per share in cash. May 20 May 31. Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note. May 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Stock Transactions for Corporate Expansion
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, $25 par (500,000 shares authorized, 110,000 shares issued)
$2,750,000
Paid-In Capital in Excess of Par-Preferred Stock
440,000
32,000,000
Common Stock, $100 par (1,000,000 shares authorized, 320,000 shares issued)
Paid-In Capital in Excess of Par-Common Stock
2,560,000
64,000,000
Retained Earnings
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 $12,300,000. The plan provided (a) that a building, valued at $3,200,000, and the land on which it is located, valued
at $4,700,000, be acquired in accordance with preliminary negotiations by the issuance of 75,000 shares of common stock, (b) that 60,000
shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $2,600,000. The plan was
approved by the stockholders and accomplished by the following transactions:
May 11.
Issued 75,000 shares of common stock in exchange for land and a building,
according to the plan.
Issued 60,000 shares of preferred stock, receiving $30 per share in cash.
Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note.
May 20.
May 31.
Required:
Journalize the entries to record the foregoing transactions.
For a compound transaction, if an amount box does not require an entry, leave it blank.
May 11. Issued 75,000 shares of common stock in exchange for land and a building, according to the plan.
May 11
May 20. Issued 60,000 shares of preferred stock, receiving $30 per share in cash.
May 20
May 31. Borrowed $2,600,000 from Laurel National, giving a 6% mortgage note.
May 31
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