Earth Star Diamonds Inc. began a potentially lucrative mining operation on October 1, 2020. It is authorized to issue 100,000 shares of $0.60 cumulative preferred shares and 500,000 common shares. The company uses the cash dividends account to keep track of all dividends declared.

Oct. 1 Issued for cash, 1,000 shares of the preferred shares at $4.20 each. 10 Issued for cash, 44,000 shares of the common stock at $3.00 per share. 15 Earth star purchased land for $180,000, paying cash of $63,000 and borrowing the balance from the bank (to be repaid in two years). 20 12,000 preferred shares were issued today for total cash proceeds of $66,960. 24 In addition to the declaration of the annual dividend on the preferred shares, dividends of $26,820 were declared on the common shares today, payable November 15, 2020. 31 Revenues of $840,000 were earned during the month; all cash. Expenses, all cash, totalling $270,000 were incurred in October. Close the Income Summary and dividend accounts.