Ehrlich Corporation is authorized to issue 20,000,000 shares of $10 par value common stock and 1,000,000 shares of its 6% cumulative $100 par value preferred stock. During 2020, it had the following transactions:

Jan. 5Issued 25,000 shares of common stock for $80/share.

Feb. 8Issued 7,000 shares of its preferred stock in exchange for land withan appraised value of $1,000,000

Apr. 1 Purchased 1,000 shares of its common stock at $80 per share.

May 9 Resold 500 shares of its common stockpurchased on April 1 at $85 per share

June 2Resold 400 shares of its common stockpurchased on April 1 at $70 per share.

Dec. 25 Declared the preferred stock dividend.

Dec. 31Reported net income of $2,000,000

INSTRUCTIONS:

a.Prepare the journal entries to record the above transactions.

b.Prepare Ehrlichs stockholders equity section of its balance sheet as of Dec 31, 2020. Make sure you show all proper share information.

Ehrlich Corporation is authorized to issue 20,000,000 shares of $10 par value common stock and 1,000,000 shares of its 6% cumulative $100 par value preferred stock. During 2020, it had the following transactions: Jan. 5 Issued 25,000 shares of common stock for $80/share. Feb. 8 Issued 7,000 shares of its preferred stock in exchange for land with an appraised value of $1,000,000 Apr. 1 Purchased 1,000 shares of its common stock at $80 per share. May 9 Resold 500 shares of its common stock purchased on April 1 at $85 per share June 2 Resold 400 shares of its common stock purchased on April 1 at $70 per share. Dec. 25 Declared the preferred stock dividend. Dec. 31 Reported net income of $2,000,000 INSTRUCTIONS: a. Prepare the journal entries to record the above transactions. b. Prepare Ehrlich's stockholders' equity section of its balance sheet as of Dec 31, 2020. Make sure you show all proper share information