Pace Oil & Gas Corp. began operations in 2012. Its balance sheet reported the following components of equity on December 31, 2012.

Pace Oil & Gas Corp.

Equity Section of the Balance Sheet

December 31, 2012

Contributed capital:

Preferred shares, $1.80 non-cumulative, unlimited shares

Authorized; 25,000 shares issued and outstanding .................................... $780,000

Common shares, unlimited shares authorized;

162,500 shares issued and outstanding..................................................... 1,755,000

Total contributed capital ............................................................................... $2,535,000

Retained earnings............................................................................................. 681,000

Total equity ...................................................................................................... $3,216,000

The corporation completed these transactions during 2013 and 2014:

Required
1. Prepare journal entries to record the transactions and closings for 2013 and 2014.
2. Prepare the statement of changes in equity for the year ended December 31, 2014.
3. Prepare the equity section of the company’s balance sheet as of December 31,2014.

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2013 1 5 Sold 50,000 common shares at $11.40 per share. The directors declared the first cash dividend totalling $191,250 payable on Feb. 28 to the Feb. 5 shareholders of record Paid the dividends declared on January 5 Issued preferred shares for a total of $486,000. The average issue price was $32.40 per share Closed the dividend accounts along with the Income Summary account, which reflected net income earned during 2013 of $768,000 an Feb. July 28 1 Dec. 31 2014 Sept. 5 The directors declared a $1.80 cash dividend per preferred share and a 0.90 per common share cash dividend payable on Oct. 28 to the Oct. 5 shareholders of record Paid the dividends declared on September 5 Closed the dividend accounts along with the $240,000 debit balance in the Income Summary account. Oct. Dec. 28 31