FRIENDZ Corporation generated a $139,000 (after income tax) during the year. The company uses the retained earnings account to record dividends. a) Prepare the journal entries to record the above transactions in 2020. Do not enter dollar signs or commas in the input boxes.

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In 2020, Elizabeth and some of her friends invested money to start a company named FRIENDZ Corporation. The following transactions occurred during 2020. Jan 1 The corporate charter authorized 66,000 shares of 5%, cumulative preferred shares and unlimited no-par value common shares. Jan 6 Issued 181,000 common shares at $10 per share to Elizabeth and other investors. Jan 7 Issued another 500 common shares to Elizabeth in exchange for her services in organizing the corporation. The shareholders agreed that the services were worth $8,000. Jan 12 issued 3,600 preferred shares for $252,000. Jan 14 Issued 9,000 common shares in exchange for equipment. The fair market value of the equipment could not be readily determined, but the market price of the common shares on this date was $16 per share. Nov 15 The first annual dividend on preferred shares declared. Dec 20 Paid the dividends declared on preferred shares. Dec 31 Estimated income tax expense of $42,400. Accounting Fees Expense Cash Cash Dividends-Common Cash Dividends-Preferred, cumulative Cash Dividends-Preferred, noncumulative Common Shares Common Stock Dividends Distributable Contributed Surplus Dividends Payable Equipment Income Tax Expense Income Tax Payable Land Organization Costs Preferred Shares Retained Earnings Date Account Title and Explanation Debit Credit Jan 6 Issued common shares for cash Jan 7 Issued common shares for services Jan 12 Issue of preferred shares for cash Jan 14 Issued common shares for equipment Nov 15 Dividend declared on preferred shares Dec 20 Recording payment of dividend Dec 31 To record tax expense and liability b) Prepare the statement of retained earnings for the year ended December 31, 2020. FRIENDZ Corporation Calculation of Retained Earnings For the Year Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends - Preferred Balance - December 31, 2020 c) Prepare the shareholders' equity section of the balance sheet as at December 31, 2020. FRIENDZ Corporation Balance Sheet (Partial) December 31, 2020 Shareholders' Equity Contributed Capital Preferred Shares, 5% cumulative, 66,000 authorized, 3,600 issued and outstanding Common Shares, unlimited authorized, 190,500 issued and outstanding Total Contributed Capital Retained Earnings Total Shareholders' Equity