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, $($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.

Journalize the entries to record the May transactions.

General Journal Instructions

PAGE $10$

JOURNALACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

May $11$

Building

$3,425,000\mathrm{.}00$

$$

Land

$150,000\mathrm{.}00$

$$

Common Stock

$4,375,000\mathrm{.}00$

$$

May $20$

Cash

$55,000\mathrm{.}00$

May $31$

Cash

$4,000,000\mathrm{.}00$

$$

$4,000,000\mathrm{.}00$