Journalize the above transactions and prepare the equity section of Graham Corporation as at December 31, 2019.
On January 1, 2019, the shareholders' equity section of Graham Corporation had the following equity accounts:
- Share Capital - Preference, 10%, $100 par value, 100,000 shares authorized and 4,000 shares issued: $400,000
- Share Capital - Ordinary, $2 par value, 500,000 shares authorized, 100,000 shares issued and outstanding: $200,000
- Share Premium - Preference: $60,000
- Share Premium - Ordinary: $150,000
- Retained Earnings: $120,000
The following transactions occurred during 2019, the first year of operations:
- Jan. 4: Issued 22,000 ordinary shares for cash at $15 per share
- Jan. 8: Issued 1,000 preference shares for cash of $110,000
- Feb. 12: Issued an additional 600 ordinary shares to Donald Law Firm in exchange for the services provided in organizing the corporation. The services provided were worth $8,000.
- Mar. 3: The corporation purchased 1,700 ordinary shares for treasury at a price of $12 per share.
- Apr. 6: Acquired land as a future building site in exchange for 16,000 ordinary shares. The fair market value of the land was $160,000.
- May 2: Sold 900 shares of the treasury shares for cash at a price of $15 per share.
- June 30: Declared 3% share dividends on 137,800 ordinary shares outstanding. The market value of ordinary shares on this date was $22 per share. Issued the shares for the share dividend.
- Dec. 15: The board of directors declared the first annual $50,000 cash dividends on the preference shares, to be paid on January 15, 2020.
- Dec. 31: Reported a net income of $250,000 for the accounting year. Closed the dividend accounts.
