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, $$50$ par $(250,000$ shares authorized, $80,000$ shares issued$)$ $$4,000,000$

Paid$-$In Capital in Excess of Par$$Preferred Stock $560,000$

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 $1,200,000$

Retained Earnings $180,000,000$

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.$ 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.

Required:

Journalize the entries to record the May transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

CHART OF ACCOUNTS

Latte Corp.

General Ledger

ASSETS

$110$ Cash

$120$ Accounts Receivable

$131$ Notes Receivable

$132$ Interest Receivable

$141$ Merchandise Inventory

$145$ Office Supplies

$151$ Prepaid Insurance

$181$ Land

$191$ Building

$192$ Accumulated Depreciation$-$Buildings

LIABILITIES

$210$ Accounts Payable

$221$ Notes Payable

$226$ Interest Payable

$231$ Cash Dividends Payable

$236$ Stock Dividends Distributable

$241$ Salaries Payable

$261$ Mortgage Note Payable

EQUITY

$311$ Common Stock

$312$ Paid$-$In Capital in Excess of Par$-$Common Stock

$315$ Treasury Stock

$321$ Preferred Stock

$322$ Paid$-$In Capital in Excess of Par$-$Preferred Stock

$331$ Paid$-$In Capital from Sale of Treasury Stock

$340$ Retained Earnings

$351$ Cash Dividends

$352$ Stock Dividends

REVENUE

$410$ Sales

$610$ Interest Revenue

EXPENSES

$510$ Cost of Merchandise Sold

$515$ Credit Card Expense

$520$ Salaries Expense

$531$ Advertising Expense

$532$ Delivery Expense

$533$ Selling Expenses

$534$ Rent Expense

$535$ Insurance Expense

$536$ Office Supplies Expense

$537$ Organizational Expenses

$561$ Depreciation Expense$-$Building

$590$ Miscellaneous Expense

$710$ Interest Expense

Journalize the entries to record the May transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE $10$

JOURNALACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY