PAGE 2 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 (260,000 shares authorized, 76,000 shares issued) $3,800,000 Paid In Capital in Excess of ParPreferred Stock 456,000 Common Stock, $30 par (1,000,000 shares authorized, 419,000 shares issued) 12,570,000 Paid In Capital in Excess of ParCommon Stock 1,676,000 Retained Earnings 159,380,000 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 $3,335,000, and the land on which it is located, valued at $898,000, be acquired in accordance with preliminary negotiations by the issuance of 124,500 shares of common stock valued at $34 per share, (b) that 39,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,100,000 The plan was approved by the stockholders and accomplished by the following transactions May 11 Issued 124,500 shares of common stock in exchange for land and a building, according to the plan 20 Issued 39,800 shares of preferred stock, receiving $53 per share in cash 31 Borrowed $4,100,000 from Laurel National, giving a 5 mortgage note Journalize the entries to record the May transactions Refer to the Chart of Accounts for exact wording of account titles 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 390 Income Summary

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 19, 2024

PAGE 2 On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor:

PAGE 2

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 (260,000 shares authorized, 76,000 shares issued)	$3,800,000
Paid-In Capital in Excess of ParPreferred Stock	456,000
Common Stock, $30 par (1,000,000 shares authorized, 419,000 shares issued)	12,570,000
Paid-In Capital in Excess of ParCommon Stock	1,676,000
Retained Earnings	159,380,000

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 $3,335,000, and the land on which it is located, valued at $898,000, be acquired in accordance with preliminary negotiations by the issuance of 124,500 shares of common stock valued at $34 per share, (b) that 39,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $4,100,000. The plan was approved by the stockholders and accomplished by the following transactions:

May 11	Issued 124,500 shares of common stock in exchange for land and a building, according to the plan.
20	Issued 39,800 shares of preferred stock, receiving $53 per share in cash.
31	Borrowed $4,100,000 from Laurel National, giving a 5% mortgage note.

Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.

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
390	Income Summary