A1. Prepare the Journal Entries for the items listed below in Exhibit 1. Be sure to date your entries. You do not need to provide Exhibit 1: 1. On February 1, the company issued 2,000 shares of their $10 PAR value Common Stock for $19 per share. 2. On May 1, the company issued 1,000 shares of 3% Cumulative Preferred Stock for $115 per share. The PAR value of this preferred Stock is $100 per share. 3. On October 1, the company issued an additional 500 shares of their $10 PAR value Common Stock for $21 per share. 4. On December 1, the company decided to purchase 200 shares of its Common Stock from shareholders to be held in treasury for Employee Bonuses. The company uses the Cost Method to account for Treasury Stock. They paid $22 per share for the stock. 5. On December 20, the company declared a Preferred Dividend that totaled $3,000. 6. The company paid the dividends on December 29, 2020. 7. The company has asked you to create the journal entry to close the income statement accounts (presented in Exhibit 2) on December 31, 2020. Exhibit 2: Kites for You, Inc. Pre-Closing (and Before Equity JES) Account balances YE 2020 Credit 1,932 17,500 Debit Cash 316,754 Accounts Receivable 193,191 Allowance for Doubtful Accounts Merchandise Inventory 53,440 Prepaid Insurance 250 Building 240,000 Accumulated Depreciation--Building Display Equipment 1,200 Accumulated Depreciation--Display Equipment Accounts Payable Salaries and Wages Payable Bank Loan Payable Mortgage Note Payable Common Stock (10,000 shares issued at PAR value) Retained Earnings Sales Revenue Cost of Goods Sold 373,503 Salaries & Wages Expense 127,000 Supplies Expense 2,390 Insurance Expense 1,990 Bad Debt Expense 1,650 Depreciation Expense 6,120 Interest Expense 12,656 Income Tax Expense 24,919 350 7,265 5,290 150,000 166,400 100,000 262,355 643,970 1,355,062 1,355,062