Shore Town Suites, Ltd. began operations at the beginning of the current year and engaged in the following transactions affecting the stockholders’ equity section of its current balance sheet. The company has 1,000,000 shares authorized for each common and preferred stock. 

1. Issued 200,000 shares of its $ 1 par value common stock at $ 26 per share. The underwriter charged a 1.0% fee for issuing the shares. 

2. Issued 100,000 shares of its $ 1 par value common stock to a major investor who contributed a new head-quarters building to Shore Town. At the time, Shore Town’s stock price was $ 27 per share. 

3. Issued 10,000 shares of 2%, $ 28 par value, convertible preferred shares for $ 290,000. Each preferred share is convertible into one share of $ 1 par common stock. 

4. Purchased 12,000 shares of common stock at $ 28 per share and immediately retired the shares. 

5. Declared a $ 82,000 dividend for the year. (The declarations should be recorded separately for the common and the preferred shares.) 

6. Paid the cash dividends. 

7. Issued 5,000 shares of $ 30 par value, 5% mandatorily redeemable preferred stock for $ 200,000. 

8. Related to transaction 3, all preferred shareholders converted their shares into common stock. 9. Reported net income of $ 865,300 for the current year. 

10. Closed out all dividends accounts.

Required 

a. Prepare all journal entries required to record the transactions listed above. 

b. Construct the shareholders’ equity section for the year- end balance sheet as well as the relevant t- accounts.