On March 1 of the current year, the following accounts and their balances appear in the ledger
Question:
On March 1 of the current year, the following accounts and their balances appear in the ledger of Mocha Corp., a coffee processor: Preferred 2% Stock, $25 par (300,000 shares authorized,
120,000 shares issued) . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000
Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,000
Common Stock, $100 par (800,000 shares authorized,
250,000 shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000
Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000
At the annual stockholders’ meeting on April 18, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $14,000,000. The plan provided (a) that a building, valued at $3,500,000, and the land on which it is located, valued at $5,000,000, be acquired in accordance with preliminary negotiations by the issuance of 80,000 shares of common stock, (b) that 85,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $3,000,000. The plan was approved by the stockholders and accomplished by the following transactions:
June 5. Issued 80,000 shares of common stock in exchange for land and a building, according to the plan.
16. Issued 85,000 shares of preferred stock, receiving $30 per share in cash.
29. Borrowed $3,000,000 from First City Bank, giving a 6% mortgage note.
No other transactions occurred during June.
Instructions
Journalize the entries to record the foregoing transactions.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer: