The balance sheet of Bayview Amusements, Inc., at December 31, 19X5, reported 100,000 shares of no-par common stock authorized, with 30,000 shares issued and a Common Stock balance of \(\$ 180,000\). Bayview also had 5,000 shares of 6 -percent, \(\$ 10\) par preferred stock authorized and outstanding. The preferred stock was issued in \(19 \mathrm{X1} 1\) at par. Retained Earnings had a credit balance of \(\$ 104,000\). During the two-year period ended December \(31,19 \mathrm{X} 7\), the company completed the following selected transactions:

19X6 Mar. 15 Purchased 4,000 shares of the company's own common stock for the treasury at \(\$ 5\) per share.

July 2 Declared the annual 6-percent cash dividend on the preferred stock and a \(\$ 0.75\) per share cash dividend on the common stock. The date of record was July 16, and the payment date was July 31 .

July 31 Paid the cash dividends.

Nov. 30 Declared a 20-percent stock dividend on the outstanding common stock to holders of record December 21, with distribution set for January 11, 19X7. The market value of Bayview common stock was \(\$ 10\) per share.

Dec. 31 Earned net income of \(\$ 104,000\) for the year.

\(19 \times 7\)

Jan. 11 Issued the stock dividend shares.

June 30 Declared the annual 6-percent cash dividend on the preferred stock. The date of record was July 14, and the payment date was July 29.

July 29 Paid the cash dividends.

Aug. 2 Purchased and retired all the preferred stock at \(\$ 14\) per share.

Oct. 8 Sold 2,800 shares of treasury common stock for \(\$ 12\) per share.

Dec. 19 Split the no-par common stock 2 for 1 by issuing two new no-par shares for each old no-par share previously issued. Prior to the split, the corporation had issued 35,800 shares. Stock splits affect all issued stock, including treasury stock as well as stock that is outstanding.

31 Earned net income of \(\$ 117,000\) during the year.

\section*{Required}

1. Record the transactions in the general journal. Explanations are not required.

2. Prepare the stockholders' equity section of the balance sheet at two dates: December 31, 19X6, and December 31, 19X7.