Lodi Company is authorized to issue 100,000 shares of no-par, $6 stated-value common stock and 10,000 shares of 9%, $100 par preferred stock. It enters into the following transactions on December 31:

1.	Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment.
2.	Collects the remaining balance of the subscription contract and issues the common stock.
3.	Acquires a building by paying $3,000 cash and issuing 3,000 shares of common stock and 900 shares of preferred stock. Common stock is currently selling at $46 per share; preferred stock has no current market value. The building is appraised at $240,000.
4.	Sells 1,000 shares of common stock at $47 per share.
5.	Sells 900 shares of preferred stock at $112 per share.
6.	Declares a three-for-one stock split on the common stock, reducing the stated value to $2.00 per share.

Required:

Prepare memorandum and journal entries to record the preceding transactions.

Chart of Accounts

CHART OF ACCOUNTS

Lodi Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
172	Building
181	Equipment
189	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
305	Preferred Stock
311	Common Stock
312	Common Stock Subscribed
318	Additional Paid-in Capital on Preferred Stock
320	Additional Paid-in Capital on Common Stock
326	Subscriptions Receivable
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

General Journal

Prepare journal entries to record the transactions on December 31. Memorandum entry is not recorded. Additional Instruction

PAGE 1PAGE 2

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8

Record items 1 and 2 on page 1 and items 3-5 on page 2