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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.

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: Selected stock transactions The following selected accounts appear in the ledger of Parks...
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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: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.
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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