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General Journal

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

Journalize the entries to record the May transactions.

Preferred $2\%$ Stock, $$50$ par $(250,000$ shares authorized, $80,000$ shares issued$)$

Paid$-$In Capital in Excess of Par$-$Preferred Stock

Common Stock, $$35$ par $(1,000,000$ shares authorized, $400,000$ shares issued$)$

Paid$-$In Capital in Excess of Par$-$Common Stock

Retained Earnings

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 $$11,000,000.$ The plan provided $($a$)$ that a building, valued at $$3,375,000,$ and the land on which it is located, valued

at $$1,500,000,$ be acquired in accordance with preliminary negotiations by the issuance of $125,000$ shares of common stock, $($b$)$ that $40,000$

shares of the unissued preferred stock be issued through an underwriter, and $($c$)$ that the corporation borrow $$4,000,000.$ The plan was

approved by the stockholders and accomplished by the following transactions:

May $11$ Issued $125,000$ shares of common stock in exchange for land and a building, according to the plan.

$20$ Issued $40,000$ shares of preferred stock, receiving $$52$ per share in cash.

$31$ Borrowed $$4,000,000$ from Laurel National, giving a $5\%$ mortgage note.

Required:

Journalize the entries to record the May transactions.

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