Doulane Marine obtained a charter from the province in January 2017 that authorized 1,000,000 common shares. During the first year, the company earned $429,000 and the following selected transactions occurred in the order given:

a. Issued 700,000 common shares at $54 cash per share

b. Reacquired and cancelled 25,000 shares at $50 cash per share

Required:

1. Indicate the effects of each transaction on the accounting equation.

2. Prepare journal entries to record each transaction.

3. Prepare the shareholders’ equity section of the balance sheet at December 31, 2017.