The stockholders' equity of Black Corporation at January 1 follows:

The following transactions, among others, occurred during the year:

Jan. 1 Announced a 4-for-1 common stock split, reducing the par value of the common stock to \(\$ 0.25\) per share.

Mar. 31 Converted \(\$ 75,000\) face value of convertible bonds payable (the book value of the bonds was \(\$ 83,000\) ) to common stock. Each \(\$ 1,000\) bond converted to 110 shares of common stock. (Record common stock entry in whole dollars. Round up.)

June 1 Acquired equipment with a fair market value of \(\$ 90,000\) in exchange for 300 shares of preferred stock.

Sept. 1 Acquired 15,000 shares of common stock for cash at \(\$ 20\) per share.

Nov. 21 Issued 5,000 shares of common stock at \(\$ 22\) cash per share.

Dec. 28 Sold 1,000 treasury shares at \(\$ 23\) per share.

31 Closed net income of \(\$ 145,000\), to the Retained Earnings account.

Required

a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances.

b. Prepare journal entries for the given transactions and post them to the T-accounts (set up any additional T-accounts needed). Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders' equity accounts.

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8 Percent preferred stock, $100 par value, 20,000 shares authorized; 5,000 shares issued and outstanding... Common stock, $1 par value, 100,000 shares authorized; 40,000 shares issued and outstanding Paid-in capital in excess of par value-Preferred stock.. Paid-in capital in excess of par value-Common stock. Retained earnings Total Stockholders' Equity.. $ 500,000 40,000 200,000 800,000 625,000 $2,165,000