On March 1 of the current year the following accounts

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) . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,000,000Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 480,000Common Stock, $100 par (800,000 shares authorized,250,000 shares issued) . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000Paid-In Capital in Excess of
Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000Retained Earnings . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000At 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.InstructionsJournalize the entries
to record the foregoing transactions.View Solution:
On March 1 of the current year the following accounts
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