Stock Transactions for Corporate Expansion

Stock Transactions for Corporate Expansion aga Optics produces medical lasers for use in hospitals. The following accounts and their balances appear in the ledger of Vaga Optics on December 31 of the current year: Preferred 2% Stock, $120 par (50,000 shares authorized, 25,000 shares issued) S 3.000.000 Paid-In Capital in Excess of Par-Preferred stock 400,000 Common stock, $75 par (500,000 shares authorized, 300,000 shares issued 22.500.000 Paid-In Capital in Excess of Par-Common stock Retained Earnings At the annual stockholders meeting on January 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $9,500,000. The plan provided (a) that the corporation borrow $4,500,000, (b) that 20,000 shares of the unissued Preferred stock be issued through an underwriter, and (c) that a building, valued at $1,200,000, and the land on which it is located, valued at $900,000, be acquired in accordance with preliminary negotiations by the issuance of 27,400 shares of Common stock. The plan was approved by the stockholders and accomplished by the following transactions: Mar. 8. Borrowed S4, 500,000 from Conrad National Bank, giving a 6% mortgage note. 540,000 55,000,000 13. Issued 20,000 shares of Preferred stock, receiving $130 per share in cash 26. Issued 27,400 shares of Common stock in exchange for land and a building, according to the plan. No other expansion-related transactions occurred during March