Dornbusch Associates was issued a charter on January 15 authorizing the following capital stock: Common stock, $6 par, 100,000 shares, one vote per share. Preferred stock, 7 percent, par value $10 per share, 5,000 shares, nonvoting. The following selected transactions were completed during the first year of operations in the order given: a. Issued 22,000 shares of the $6 par common stock at $20 cash per share. b. Issued 3,200 shares of preferred stock at $24 cash per share. c. At the end of the year, the accounts showed net income of $40,000. No dividends were declared. Required: 1. Prepare the stockholders' equity section of the balance sheet at December 31. 2. Assume that you are a common stockholder of Dornbusch Associates. If the company needed additional capital, would you prefer to have it issue additional common stock or additional preferred stock?