Diamond Optics produces medical lasers for use in

hospitals The
Diamond Optics produces medical lasers for use in hospitals. The following accounts and their
balances appear in the ledger of Diamond Optics on September 30 of the current year:Preferred
5% Stock, $100 par (20,000 shares authorized, 12,000 shares issued) .....$1,200,000Paid-In
Capital in Excess of Par—Preferred Stock ................180,000Common Stock, $25 par (100,000
shares authorized, 72,000 shares issued) .......1,800,000Paid-In Capital in Excess of
Par—Common Stock ................240,000Retained Earnings ............................3,572,500At the
annual stockholders’ meeting on October 19, the board of directors presented a plan for
modernizing and expanding plant operations at a cost of approximately $2,500,000. The plan
provided (a) that the corporation borrow $780,000, (b) that 6,000 shares of the unissued
preferred stock be issued through an underwriter, and (c) that a building, valued at $900,000,
and the land on which it is located, valued at $120,000, be acquired in accordance with
preliminary negotiations by the issuance of 24,000 shares of common stock. The plan was
approved by the stockholders and accomplished by the following transactions:Nov. 5 Borrowed
$780,000 from Bozeman National Bank, giving a 7% mortgage note.20 Issued 6,000 shares of
preferred stock, receiving $120 per share in cash from the underwriter.23 Issued 24,000 shares
of common stock in exchange for land and a building, according to the plan.No other
transactions occurred during November.InstructionsJournalize the entries to record the
foregoing transactions.View Solution:
Diamond Optics produces medical lasers for use in hospitals The
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