I have read my text book I think about 100 times and still don't understand the one problem that I have been working on for a week now. Our book doesn't give anything that is helpful and I just need to know how to get started. Here is the exact problem.

On January 31 of the current year, the following accounts and their balances appear in the ledger of Gargantuan Corp. a meat processor:

Preferred 3% Stock, $25 par (50,000 shares authorized,
30,000 shares issued)... $750,000
Paid-In Capital in Excess of Par--Preferred Stock... 90,000
Common Stock, $30 par (400,000 shares authorized,
120,000 shares issued)... 3,600,000
Paid-In Capital in Excess of Par--Common Stock... 300,000
Retained Earnings... 5,794,000

At the annual stockholders' meeting on April 2, the board of directors presented a plan for modernizing a expanding plant operations at a cost of approximately $2,550,000. The plan provided (a) that a building, valued at $1,200,000, and the land on which it is located, valued at $300,000, be acquired in accordance with preliminary negotiations by the issuance of 45,000 shares of common stock, (b) that 15,000 shared of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $500,000. The plan was approved by the stockholders and accomplished by the following transactions:

June 6. Issued 45,000 shares of common stock in exchange for land and a
building, according to the plan.
14. Issued 15,000 shared of preferred stock, receiving $36 per share in
cash
30. Borrowed $500,000 from Mt. Baker National Bank, giving a 7%
mortgage note

No other transactions occurred during June.

Instructions
Journalize the entries to record the foregoing transactions.


Any help would be appreciated I am at my whitts end.

First ignore all the jibberish about the board meeting as it isn't relevant to doing the entries. You have 3 transactions. As for the one of the 30th, this is not relevant to a corporation chapter and is something that prior material should have taught you. If you take that as fairly straight-forward can you figure it out?

Then take a look at this:
Principles of Accounting Chapter 14
It's basically just an online textbook but perhaps it explains something better than your book? Give it a whirl and see if you can at least come up with some guesses. Post them and let someone take a look.

Quote:

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Originally Posted by morgaine300

First ignore all the jibberish about the board meeting as it isn't relevant to doing the entries. You have 3 transactions. As for the one of the 30th, this is not relevant to a corporation chapter and is something that prior material should have taught you. If you take that as fairly straight-forward can you figure it out?

Then take a look at this:
Principles of Accounting Chapter 14
It's basically just an online textbook but perhaps it explains something better than your book? Give it a whirl and see if you can at least come up with some guesses. Post them and let someone take a look.

---

Ok so I looked at what you told me to look at and I think that I got it so here are my answers.

Month Day Account DR CR
June 6 Building 1,200,000
Land 300,000
Common Stock 1,350,000
Paid-in-Capital in
Excess of Par - Common Stock 1,500,000

June 14 Cash 540,000
Preferred Stock 375,000
Paid-in-Capital in
Excess of Par - Preferred Stock 165,000

June 30 Cash 500,000
Mortgage Note Payable 500,000

If you could let me know if this looks right and anything that I may be doing wrong I would appreciate it.

Thanks

I have read my text book I think about 100 times and still don't understand the one problem that I have been working on for a week now. Our book doesn't give anything that is helpful and I just need to know how to get started. Here is the exact problem.

On January 31 of the current year, the following accounts and their balances appear in the ledger of Gargantuan Corp. a meat processor:

Preferred 3% Stock, $25 par (50,000 shares authorized,
30,000 shares issued).. . $750,000
Paid-In Capital in Excess of Par--Preferred Stock... 90,000
Common Stock, $30 par (400,000 shares authorized,
120,000 shares issued).. . 3,600,000
Paid-In Capital in Excess of Par--Common Stock... 300,000
Retained Earnings.. . 5,794,000

At the annual stockholders' meeting on April 2, the board of directors presented a plan for modernizing a expanding plant operations at a cost of approximately $2,550,000. The plan provided (a) that a building, valued at $1,200,000, and the land on which it is located, valued at $300,000, be acquired in accordance with preliminary negotiations by the issuance of 45,000 shares of common stock, (b) that 15,000 shared of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $500,000. The plan was approved by the stockholders and accomplished by the following transactions:

June 6. Issued 45,000 shares of common stock in exchange for land and a
building, according to the plan.
14. Issued 15,000 shared of preferred stock, receiving $36 per share in
cash
30. Borrowed $500,000 from Mt. Baker National Bank, giving a 7%
mortgage note

No other transactions occurred during June.

Instructions
Journalize the entries to record the foregoing transactions.


Any help would be appreciated I am at my whitts end.

Here is my answer morgaine300 if you could please take a look at it I would appreciate it
Month Day Account DR CR
June 6 Building 1,200,000
Land 300,000
Common Stock 1,350,000
Paid-in-Capital in Excess
of Par - Common Stock 1,500,000

June 14 Cash 540,000
Preferred Stock 375,000
Paid-in-Capital in Excess
of Par - Preferred Stock 165,000

June 30 Cash 500,000
Mortgage Note Payable 500,000

Quote:

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Month Day Account DR CR
June 6 Building 1,200,000
Land 300,000
Common Stock 1,350,000
Paid-in-Capital in
Excess of Par - Common Stock 1,500,000

---

Check your calculations. The excess is 150,000.

Notice when you post, the columns go away so you need to put Dr and Cr in front of or in back of every account. I'm running on the assumption that these are all in the correct columns. But except for the above minor error, everything looks to be correct. :)

As a side note, it's looking like you posted a new message and that a moderator may have tacked it onto this thread. Please don't start more than one thread on the same problem - it just causes us confusion.