BiBa Manufacturing’s charter authorized the company to issue an unlimited number of common shares and 750,000 preferred shares. The following transactions occurred during BiBa’s first year of business:

Jan 10 Issued 5,000 common shares to the firm’s promoters for the work done to set up the corporation. This work has an estimated value of $60,000.

May 21 40,000 shares were issued for cash of $15 per share.

July 25 15,000 preferred shares were issued for cash totaling $225,000.

Oct 1 50,000 common shares in total were issued for land, buildings, and equipment with appraised values of $250,000, $380,000, and $170,000 respectively.

Requirements

1. Prepare journal entries for all the transactions.

2. Prepare the shareholders’ equity section of the balance sheet at December 31, 2014