Meriweather, Inc. was formed on January 1, 2022 with two classes of capital stock: 5%, $100 par non-cumulative preferred and $1 par common. The company was authorized to issue 200,000 shares of preferred stock, and 25,000,000 shares of common stock. The following transactions occurred during 2022.

January 2: Issued 10,000 shares of preferred stock for par value.

January 2: Issued 5,000,000 shares of common stock for $8 per share.

April 1: 25,000 shares of common stock were repurchased by Meriweather at $12 per share. Meriweather uses the cost method for treasury stock.

December 15: Total dividends of $200,000 were declared by the board of directors to payable January 15, 2023, to shareholders of record on December 25.

The company records dividends as a debit to retained earnings (not a dividends account like Rockford) but records separate credits to Dividends Payable-Preferred Stock and Dividends Payable-Common Stock. (Two separate liability accounts, one entry.)

After all adjusting entries were posted, the companys net income was $450,000. Prepare the entry to close net income from income summary into retained earnings as of December 31.

Answer:

Prepare journal entries in proper form for the 2022 transactions above. (Do not prepare any 2023 entries.) Provide dates, explanations, and calculations in the explanations. Format all amounts with two decimal places and dollar signs (Accounting format is preferred). If no entry is required, briefly explain the situation in complete sentences (which is, in effect, a memo entry, of a type sometimes recorded in journals).