I. At the beginning of 20x1, Metro showed the following amounts in the stockholders' equity section of its balance sheet:

Stockholders' Equity:

Common stock, $1 par, 500,000 shares authorized, 382,000 shares issued and outstanding $ 382,000

PCIEP 4,202,000

Retained earnings2,704,600

Total stockholders' equity $7,288,600

The transactions relating to stockholders' equity accounts during the year are as follows:

1/3Declared a dividend of $1 per share to stockholders of record on 1/31, payable on 2/15.

2/15Paid the cash dividend declared on 1/3.

4/12Metro purchased 6,000 shares of its own common stock at a price of $40 per share.

5/9Reissued 4,000 shares of the treasury stock at a price of $44 per share.

6/1Declared a 5% stock dividend to stockholders of record at 6/15, to be distributed on 6/30.The market price of the stock was $42 per share on 6/1 and $45 per share on 6/15.

6/30Distributed the stock dividend declared on 6/1.

Required:

1)Prepare in general journal form the entries to record the above transactions.

2)Prepare the stockholders' equity section of the balance sheet at 12/31/x1.