Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders' equity section:

Jacobi Company

Balance Sheet (Shareholders' Equity)

December 31, 2015

1

Contributed Capital:

2

Preferred stock, 6%, $100 par

$200,000.00

3

Additional paid-in capital on preferred stock

12,000.00

$212,000.00

4

Common stock, $5 par

$150,000.00

5

Additional paid-in capital on common stock

240,000.00

390,000.00

6

Total contributed capital

$602,000.00

7

Retained earnings

627,000.00

8

Accumulated other comprehensive income (loss):

9

Unrealized decrease in value of available-for-sale securities

(41,000.00)

10

Total contributed capital, retained earnings, and accumulated other comprehensive income

$1,188,000.00

11

Less: Treasury stock (1,000 shares of common stock at cost, acquired on 2/3/2015)

(20,000.00)

12

Total Shareholders' Equity

$1,168,000.00

The company engaged in the following stock transactions during 2016:

Jan.4Paid the semiannual dividend on the outstanding preferred stock and a $1.60 per share annual dividend on the outstanding common stock. These dividends had been declared on December 1, 2015.5Issued 500 shares of preferred stock at $110 per share.22Issued 4,000 shares of common stock at $23 per share.Apr.2Reissued 700 shares of treasury stock at $24 per share.May14Declared a 10% stock dividend on the outstanding common stock, payable on June 29. The common stock is currently selling for $25 per share.Jun.4Declared the semiannual cash dividend on the outstanding preferred stock, payable on July 5.29Issued the stock dividend declared on May 14.Jul.5Paid the cash dividend declared on June 4.20Split the common stock 2-for-1 and reduced the par value to $2.50 per share.Aug.3Declared a property dividend, payable to common shareholders on September 14. The dividend consists of an available-for-sale investment in 50 Drot Company bonds. The bonds had been acquired for $45,000, but have a carrying value of $30,000. The bonds are currently selling for $20,000.Sep.14Paid the property dividend declared on August 3.Dec.3Declared the semiannual cash dividend on the outstanding preferred stock and a $0.90 per share annual dividend on the outstanding common stock.

Required:

1.Prepare journal entries to record the preceding transactions.

2.Prepare the December 31, 2016, shareholders' equity section (assume that 2016 net income was $270,000).