Dinah Soars, Biff Wellington and Duane Pipe are the stockholders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $5 par common stock, and 50,000 shares of $40 par, 3%, preferred stock. As of January 1, 2016, there were 20,000 shares of common stock issued and outstanding and 4,000 shares of preferred stock issued and outstanding. Selected transactions completed by Sharpe Incorporated during the fiscal yearending December 31, 2016, are as follows: Jan 1 Issued 16,000 shares of $5 par common stock at $18, receiving cash. Jan 1 Issued 7,200 shares of $40 par preferred 3% stock at $72 for cash. Jan 31 Purchased a two-year insurance policy for $34,080. Feb 1 Purchased equipment for $290,000, paying $50,000 cash and financing the remainder with a 180-day, 5% note payable. Mar 12 Purchased land for $325,000 by issuing 10,000 shares of common stock. May 1 Purchased 1,200 shares of the companys own common stock at $22 per share. May 31 Issued $1,000,000 of 9-year, 8% bonds with interest payable semiannually. The amount of cash received was $1,092,880. July 30 Paid the amount due on the note payable signed on February 1. Aug 1 Sold 450 shares of treasury common stock purchased on May 1 for $26 per share. Sept 15 Declared a 2% stock dividend on common stock to be distributed on September 30 to stockholders of record on September 20. The market price per share on September 15 is $25 per share. Sept 30 Distributed the stock dividend declared September 15. Oct 1 Borrowed $36,000 from Second Bank by issuing an 7% note. The note is to be repaid in quarterly payments of principal plus interest totaling $2,130 per quarter. Oct 16 Sold 250 shares of treasury common stock purchased on May 1 for $20 per share. Nov 30 Paid the semiannual interest and amortized the premium on the bonds issued on May 31. Dec 1 Declared a cash dividend at the stated amount to preferred stockholders and .50 per share to common stockholders payable on December 30 to stockholders of record on December 16. (Hint: dont forget the shares distributed from the stock dividend) Dec 30 Paid the cash dividends declared on December 1. Dec 31 Paid the first quarterly installment of the note issued on October 1. Dec 31 Record revenue for the year of $1,975,000, received $500,000 in cash, the remainder is on account. Dec 31 Record expenses for the year, paid in cash (one compound entry): Rent $170,000 Utilities 13,200 Salaries 760,000 Advertising 140,000 Medical insurance 32,000 Commissions 63,000 Legal and accounting 18,000 Miscellaneous 8,400 Adjusting Entries (1) The employees accrued vacation pay at the end of the year was $26,000. (2) Record depreciation on the equipment purchased on February 1, using the straight-line method. The equipment has an estimated 9-year useful life and an estimated residual value of $13,520. (3) Record insurance expired on the policy purchased January 31. (4) Record the adjusting entry for the interest accrued and the amortization of the premium on the bonds payable.