On December 15 of 2018, Susan and Marko Jones decided to incorporate their business and create a new corporation Blue Mountain Monkey Juice. The legal papers were filed and on January 1, 2019 the new corporation was created. They contributed all of their existing business equipment (valued at $23,000) and $5,000 in cash into the corporation and took 7,000 shares. They then arranged to sell another 3,000 shares to investors and received $36,000 for the shares.

Step 1: Record the transactions, showing the journal entries required as well as a trial balance once the shares have been issued.

Step 2: At year-end, there is an increase of $7,000 in Cash, $18,000 in Accounts receivable, and a $4,000 accounts payable balance and the net income of the company is $21,000. Update your trial balance to reflect these changes.

Step 3: The board of directors declared a dividend of $10,000 on January 3, 2020 to be paid out on January 21 to the shareholders of record as of January 15. Write out the journal entries for these transactions and show the Equity section of the balance sheet. Cash 5 000 Business Equipment 23 000 Shares Capital, Jones 35 000