Donroy Corporation was authorized to issue unlimited preferred shares, $0.30, no-par value, and unlimited common shares, no-par value.

During the first year, the following transactions occurred:

80,000 common shares were sold for cash at $12 per share.

Share issue costs of $18,200 were paid; this amount was treated as a reduction to retained earnings.

4,000 preferred shares were sold for cash at $25 per share.

8,000 common shares were reacquired and retired for $12.50 per share.

Cash dividends of $10,000 were declared and paid. Indicate the split between common and preferred dividends.

5,000 common shares and 500 preferred shares were given as payment for a small manufacturing facility that the company needed.

This facility originally cost $90,000 and had a depreciated value on the books of the selling company of $45,000. The fair value of the facility was estimated to be $80,000.

Required:

Give journal entries to record the above transactions. State and justify any assumptions you made. Prepare the shareholders' equity section of the SFP at year-end. Net earnings and comprehensive income was $216,400.