I need a full explanation of the salution please

Question 4: Shareholders' Equity [28 points] Bay State Corporation has the following capital structure at the beginning of 2018 9% Cumulative Preferred stock, $100 par value, 100,000 shares authorized, 20,000 shares issued and outstanding $ 2,000,000 Common stock, $1 par value, 10,000,000 shares authorized, 2,600,000 shares issued and 2,578,000 shares outstanding 2,6 2,600,000 1,080,000 14,000 5,694,000 1,560,000 (550,000) Paid-in capital, share repurchase... Total paid-in capital. Retained earnings. Treasury stock (22,000 shares, at cost of $25/share)....r. Total stockholders' equity The preferred dividends for 2017 were in arrears. In 2018, the company had the following transactions, which occurred consecutively. Prepare general journal entries to record these transactions. Assume that the company uses the cost method with FIFO assumption to account for its treasury stock transactions The company purchased 40,000 shares of its common stock as treasury shares at $28.50 per share 1. Account name Debit Credit 2. The company declared annual cash dividends on its preferred shares (including dividends in arrears), and a $0.20 per-share cash dividend on its common shareis Account name Debit Credit