Shohei Inc.'s shareholders' equity on December 31, 2014, was as follows:
Shareholders' Equity
Share Capital:
Preferred Shares, $0.75 accumulated deferred dividends,
500,000 shares authorized, 100,000 issued and outstanding ..................... $1,000,000
Common Shares, unlimited number of shares authorized,
250,000 shares issued and outstanding .............................................. $4,000,000
Retained Earnings ....................................................................... 750,000
Total Shareholders' Equity ............................................................ $5,750,000
During 2015, the following transactions occurred.
Jan 2 10,000 preferred shares were issued at $22.00 per share.
Feb 1 12,000 common shares were issued in exchange for a building with a fair value of $300,000.
Nov 25 Declared preferred dividends to be paid on December 23.
Dec 27 Declared 5% common stock dividend, when the market price was $25, to be distributed on January 30, 2016.
Dec 31 Net income for the year was $520,000.
Requirements
1. Journalize the above transactions.
2. Prepare the shareholders' equity section of the Shohei Inc. statement of financial position as of December 31, 2015.