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 (260,000 shares authorized, 76,000 shares issued) $3,800,000 Paid-In Capital in Excess of Par—Preferred Stock 456,000 Common Stock, $30 par (1,000,000 shares authorized, 419,000 shares issued) 12,570,000 Paid-In Capital in Excess of Par—Common Stock 1,676,000 Retained Earnings 159,380,000 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 $3,335,000, and the land on which it is located, valued at $898,000, be acquired in accordance with preliminary negotiations by the issuance of 124,500 shares of common stock valued at $34 per share, (b) that 39,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,100,000. The plan was approved by the stockholders and accomplished by the following transactions: May 11 Issued 124,500 shares of common stock in exchange for land and a building, according to the plan. 20 Issued 39,800 shares of preferred stock, receiving $53 per share in cash. 31 Borrowed $4,100,000 from Laurel National, giving a 5% mortgage note. Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.
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 (260,000 shares authorized, 76,000 shares issued) $3,800,000 Paid-In Capital in Excess of Par—Preferred Stock 456,000 Common Stock, $30 par (1,000,000 shares authorized, 419,000 shares issued) 12,570,000 Paid-In Capital in Excess of Par—Common Stock 1,676,000 Retained Earnings 159,380,000 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 $3,335,000, and the land on which it is located, valued at $898,000, be acquired in accordance with preliminary negotiations by the issuance of 124,500 shares of common stock valued at $34 per share, (b) that 39,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,100,000. The plan was approved by the stockholders and accomplished by the following transactions: May 11 Issued 124,500 shares of common stock in exchange for land and a building, according to the plan. 20 Issued 39,800 shares of preferred stock, receiving $53 per share in cash. 31 Borrowed $4,100,000 from Laurel National, giving a 5% mortgage note. Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...
Related questions
Question
100%
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 (260,000 shares authorized, 76,000 shares issued) | $3,800,000 |
Paid-In Capital in Excess of Par— |
456,000 |
Common Stock, $30 par (1,000,000 shares authorized, 419,000 shares issued) | 12,570,000 |
Paid-In Capital in Excess of Par—Common Stock | 1,676,000 |
159,380,000 |
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 $3,335,000, and the land on which it is located, valued at $898,000, be acquired in accordance with preliminary negotiations by the issuance of 124,500 shares of common stock valued at $34 per share, (b) that 39,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,100,000. The plan was approved by the stockholders and accomplished by the following transactions:
May 11 | Issued 124,500 shares of common stock in exchange for land and a building, according to the plan. |
20 | Issued 39,800 shares of preferred stock, receiving $53 per share in cash. |
31 | Borrowed $4,100,000 from Laurel National, giving a 5% mortgage note. |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning