King Corporation began operations in January 2018. The charter authorized the following share capital:Preferred shares: 10 percent, $25 par value, authorized 58,000 shares.Common shares: no par value, authorized 190,000 shares.During 2018, the following transactions occurred in the order given:a.Sold and issued 29,000 common shares to each of the three organizers. Collected $8 cash per share from two of the organizers, and received a plot of land with a small building on it in full payment for the shares of the third organizer and issued the shares immediately. Assume that 20 percent of the non-cash payment received applies to the building.b.Sold and issued 7,800 preferred shares at $25 per share. Collected the cash and issued the shares immediately.c.Sold and issued 3,800 preferred shares at $25 and 3,800 common shares at $11 per share. Collected the cash and issued the shares immediately.d.The operating results at the end of 2018 were as follows: Revenues$420,000 Expenses, including income taxes 195,0001.Prepare the journal entries to record each of these transactions and to close the accounts. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)a.Record sale and issue of 87,000 common shares at $8 per share.b.Record sale and issue of 7,800 preferred shares at $25 per share.c. Record sale and issue of 3,800 preferred shares at $25 per share and 3,800 common shares at $11 per shared. Record closing entry to transfer revenues and expenses to income summary.e. Record closing entry to transfer the profit to Retained earnings.2.Prepare the shareholders’ equity section of the statement of financial position for King Corporation as at December 31, 2018.
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