Correct or provide the journal entries and provide a reason behind it:

1. In conjunction with the sale of common shares and warrants to the public on January 1, 20X2, the company also sold preferred shares to the CEO of the company. Her reputation was instrumental in attracting interest in the sale of the companys common shares. As part of her compensation package, the CEO was able to purchase 45,000 preferred shares that pay a 7% cumulative dividend. Each preferred share has a stated value of $230 each and the company must redeem half of the shares on December 31, 20X5 and the rest on December 31, 20X9 at their stated value.

The CEO was only able to pay for three quarters of the shares. Nonetheless, the company issued all 45,000 shares on January 1, 20X2. The CEO agreed that if the company declared and paid any dividends, the company could use the dividends to reduce the amount she still owes the company. The accountant has only made one entry relating to these shares as follows:

Dr. Cash 4,320,000

Cr. Preferred shares 4,320,000

However, on April 1, 20X2, the CEO expressed the need for some extra cash and the board decided that rather than giving her an advance on her pay, they would instead authorize the company to buy back 30% of the preferred shares at a price of $110 per share. The CEO agreed to this, and the accountant recorded the following:

Dr. Preferred shares 680,000

Cr. Cash 680,000

2. On December 31, 20X8 the company purchased some land. The seller of the land was prepared to receive non-interest-bearing note due in one year with a maturity value of $805,300 but at the last minute insisted on receiving 93,200 common shares instead. On December 31 market interest rates were still 7%. The accountant recorded:

Dr. Land 805,300

Cr. Common shares 805,300