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On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp

Accounting

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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 4% Stock, $50 par (300,000 shares authorized, 80,000 shares issued)$4,000,000

Paid-In Capital in Excess of Par—Preferred Stock800,000

Common Stock, $100 par (900,000 shares authorized, 350,000 shares issued)35,000,000

Paid-In Capital in Excess of Par—Common Stock2,800,000

Retained Earnings70,000,000

At the annual The owners of a corporation.stockholders' meeting on March 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $13,450,000. The plan provided (a) that a building, valued at $2,800,000, and the land on which it is located, valued at $4,100,000, be acquired in accordance with preliminary negotiations by the issuance of 65,000 shares of The stock outstanding when a corporation has issued only one.class of stock.common stock valued at $94 per share, (b) that 50,000 shares of the unissued A class of stock with preferential rights over common stock.preferred stock be issued through an underwriter, and (c) that the corporation borrow $3,800,000.

 

The plan was approved by the stockholders and accomplished by the following transactions:

 

Required:

Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank.

May 11. Issued 65,000 shares of common stock in exchange for land and a building, according to the plan.

 

 

May 20. Issued 50,000 shares of preferred stock, receiving $55 per share in cash.

 

 

May 31. Borrowed $3,800,000 from Laurel National, giving a 6% mortgage note.