Project Description:

vaga optics produces medical lasers for use in hospitals. the accounts and their balances appear in the ledger of vaga optics on december 31 of the current year as follows:

preferred 2% stock, $120 par (50,000 shares authorized, 25,000 shares issued) $ 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 540,000
retained earnings 55,000,000

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 $4,500,000 from conrad national bank, giving a 6% mortgage
-mar 13. issued 20,000 shares of preferred stock, receiving $130 per share in cash.
-mar 26. issued 27,400 shares of common stock in exchange for land and a build-ing, according to the plan.
no other transactions occurred during march.

illustrate the effects on the accounts and financial statements of each of the preceding transactions.
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Price Type: Negotiable

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