Earth Star Diamonds Inc. began a potentially lucrative mining operation on October 1, 2020. It is authorized to issue 100000 shares of $ 0.60 cumulative preferred shares and 500000 common shares . The company uses the cash dividends account to keep track of all dividends declared Part A Required : Prepare journal entries for each of the transactions listed . Oct. 1 Issued for cash , 1,000 shares of the preferred shares at $ 5.60 each . 10 Issued for cash , 58,000 shares of the common stock at $4.40 per share . 15 Earth star purchased land for $ 194,000 , paying cash of $ 70,000 and borrowing the balance from the bank ( to be repaid in two years ). 20 19,000 preferred shares were issued today for total cash proceeds of $ 108,680 . 24 In addition to the declaration of the annual dividend on the preferred shares , dividends of $ 26,960 were declared on the common shares today , payable November 15 , 2020 . 31 Revenues of $980,000 were earned during the month ; all cash . Expenses , all cash , totalling $ 340,000 were incurred in October . Close the Income Summary and dividend accounts .