Karson's Nautical Ltd. produces shipping navigation equipment. The shareholders' equity accounts of Karson's Nautical Ltd., with balances on January 1, 2015, are as follows:
Common shares (750,000 shares authorized, 175,000 shares issued and outstanding)....$5,425,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,700,000
The following selected transactions occurred during the year:
Jan. 6. Paid cash dividends of $0.20 per share. The dividend had been properly recorded when declared on November 29 of the preceding fiscal year.
Apr. 3. Issued 30,000 common shares for $960,000.
Nov. 7. Issued 35,000 common shares at $36 per share.
Dec. 30. Declared a $0.25-per-share dividend. Karson's Nautical does not use a cash dividends account.
31.
Recorded the closing entry for the income for the year of $650,000.
Instructions
1. Journalize the entries to record the transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2015.
3. Prepare the shareholders' equity section of the December 31, 2015, balance sheet.