On Jan. 1, 2018, the following accounts and their balances appeared in the ledger of the Fuentes Corporation:

Preference P9 Shares, P100 par, 10,000 shares

authorized, 5,000 shares issued P 500,000

Share Premium-Preference 80,000

Ordinary Shares, P20 par, 100,000 shares

authorized, 75,000 shares issued 1,500,000

Share Premium-ordinary 125,000

Retained Earnings 505,000

At the annual shareholders' meeting on Feb. 11, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately P600,000. The plan provided (a) that the corporation borrow P175,000, (b) that 1,000 shares of the unissued preference shares be issued through an underwriter, and (c) that a building valued at P280,000, and the land on which it is located, valued at P50,000, be acquired in accordance with preliminary negotiations by the issuance of 15,000 ordinary shares. The plan was approved by the shareholders and the accomplished by the following transactions:

Mar. 3 Issued 15,000 ordinary shares in exchange for land and a building according to the plan.

Mar. 15 Issued 1,000 preference shares, receiving P105 per share in cash from the underwriter.

Mar. 31 Borrowed P175,000 from Philippine National Bank, giving a 12% mortgage note.

No other transactions occurred during March.

Required:

1. Journalize the entries to record the foregoing transactions.
2. Prepare the shareholders' equity section of the statement of financial position as ta March 31, 2018.