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

Contributed Capital:

Preferred stock, 6%, $100 par $200,000.00

Additional paid-in capital on preferred stock 12,000.00 $212,000.00

Common stock, $5 par $150,000.00

Additional paid-in capital on common stock 240,000.00 390,000.00

Total contributed capital $602,000.00

Retained earnings 627,000.00

Accumulated other comprehensive income (loss):

Unrealized decrease in value of available-for-sale securities (41,000.00)

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

$1,188,000.00

Less: Treasury stock (1,000 shares of common stock at cost, acquired on 2/3/2015)(20,000.00)

Total Shareholders' Equity $1,168,000.00

The company engaged in the following stock transactions during 2016:

Jan.4 Paid 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.

5 Issued 500 shares of preferred stock at $110 per share.

22 Issued 4,000 shares of common stock at $23 per share.

Apr. 2 Reissued 700 shares of treasury stock at $24 per share.

May 14 Declared a 10% stock dividend on the outstanding common stock, payable on June 29. The common stock is currently selling for $25 per share.

Jun. 4 Declared the semiannual cash dividend on the outstanding preferred stock, payable on July 5.

29 Issued the stock dividend declared on May 14.

Jul. 5 Paid the cash dividend declared on June 4.

20 Split the common stock 2-for-1 and reduced the par value to $2.50 per share.

Aug. 3 Declared 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. 14 Paid the property dividend declared on August 3.

Dec. 3 Declared 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).

Chart of Accounts

Jacobi Company

General Ledger

ASSETS

111 Cash

115 Investment in Stock

119 Allowance for Change in Fair Value of Investment

121 Accounts Receivable

141 Inventory

152 Prepaid Insurance

181 Equipment

198 Accumulated Depreciation

LIABILITIES

211 Accounts Payable

231 Salaries Payable

250 Unearned Revenue

261 Income Taxes Payable

272 Property Dividends Payable

273 Dividends Payable: Preferred

274 Dividends Payable: Common

EQUITY

305 Preferred Stock

311 Common Stock

315 Common Stock to be Distributed

321 Additional Paid-in Capital on Preferred Stock

322 Additional Paid-in Capital on Common Stock

323 Additional Paid-in Capital from Treasury Stock

324 Additional Paid-in Capital from Stock Dividend

329 Unrealized Decrease in Value of Available-for-Sale Securities

331 Retained Earnings

335 Treasury Stock

REVENUE

411 Sales Revenue

EXPENSES

500 Cost of Goods Sold

511 Insurance Expense

512 Utilities Expense

521 Salaries Expense

532 Bad Debt Expense

540 Interest Expense

541 Depreciation Expense

559 Miscellaneous Expenses

910 Income Tax Expense

913 Loss on Disposal of Investment

Labels and Amount Descriptions

Labels

Contributed Capital

Accumulated Other Comprehensive Income (Loss)

Amount Descriptions

Total Contributed Capital

Total Contributed Capital, Retained Earnings, and Accumulated Other Comprehensive Income

Total Shareholders' Equity