Bagman Corporation was organized early in 2014. The articles of incorporation

Authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock.

The following transactions affecting stockholders equity were completed during the first year:

1. Issued 50 shares of preferred stock at par value as payment for legal services.

2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par.

3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000.

4. Declare d the required cash dividend on preferred stock and a $2 per share dividend on common stock.

5. Closed the $200,000 credit balance in the Income Summary Account.

Required:

a. Prepare journal entries to record these transactions.

b. Prepare the stockholders equity section of the balance sheet