On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor $3,550.000 Preferred 2% Stock, $50 par (250,000 shares authorized, 71,000 shares issued) Paid-In Capital in Excess of Par-Preferred Stock 426.000 14.280.000 Common Stock, $35 par (1,000,000 shares authorized, 408,000 shares issued) Paid-In Capital in Excess of ParCommon Stock 816,000 155,710,000 Retained Eamings 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 $3,406,000, and the land on which it is located, valued at $1,718,000, be acquired in accordance with preliminary negotiations by the issuance of 122,000 shares of common stock valued at $42 per share, (b) that 40,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $3,650,000. The plan was approved by the stockholders and accomplished by the following transactions: May 11 20 Issued 122,000 shares of common stock in exchange for land and a building, according to the plan. Issued 40,800 shares of preferred stock, receiving S52 per share in cash. Borrowed $3,650,000 from Laurel National, giving a 6% mortgage note. 31 Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording account titles CHART OF ACCOUNTS Latte Corp. General Ledger ASSETS REVENUE 410 Sales 610 Interest Revenue 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 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 LIABILITIES 210 Accounts Payable 221 Notes Payable 22 Interest Payable 231 Cash Dividends Payable 238 Stock Dividends Distributable 241 Salaries Payable 281 Mortgage Note Payable 710 Interest Expense 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 390 Income Summary Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 5 6 7 & 9