Diamond Optics produces medical lasers for use in hospitals. The following accounts and their balances appear in the ledger of Diamond Optics on September 30 of the current year:

Preferred 5% Stock, $100 par (20,000 shares authorized, 12,000 shares issued) .....$1,200,000

Paid-In Capital in Excess of Par—Preferred Stock ................180,000

Common Stock, $25 par (100,000 shares authorized, 72,000 shares issued) .......1,800,000

Paid-In Capital in Excess of Par—Common Stock ................240,000

Retained Earnings ............................3,572,500

At the annual stockholders’ meeting on October 19, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $2,500,000. The plan provided (a) that the corporation borrow $780,000, (b) that 6,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that a building, valued at $900,000, and the land on which it is located, valued at $120,000, be acquired in accordance with preliminary negotiations by the issuance of 24,000 shares of common stock. The plan was approved by the stockholders and accomplished by the following transactions:

Nov. 5 Borrowed $780,000 from Bozeman National Bank, giving a 7% mortgage note.

20 Issued 6,000 shares of preferred stock, receiving $120 per share in cash from the underwriter.

23 Issued 24,000 shares of common stock in exchange for land and a building, according to the plan.

No other transactions occurred during November.

Instructions

Journalize the entries to record the foregoing transactions.