operations with long-tern debt LOI 1-4, LO 11-5 PROBLEM 11.4A Stockholders' Equity: A Short Comprehensive Problem Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Commu- nications, Inc. The corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative preferred stock and 400,000 shares of $2 par value common stock. The following trans- actions (among others) occurred during the year Jan. 6 Issued for cash 20,000 shares of common stock at $14 per share. The shares were Jan. 7 Issued an additional 500 shares of common stock to Sharnes in exchange for his ser- Jan. 12 Issued 2,500 shares of preferred stock for cash of $250,000. issued to Sharnes and 10 other investors vices in organizing the corporation. The stockholders agreed that these services were worth $7,000. Acquired land as a building site in exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stock was to be valued for purposes of this transaction at S15 per share The first annual dividend of S10 per share was declared on the preferred stock to be paid December 20. June 4 Nov. 15 Paid the cash dividend declared on November 15 Dec. 20 Dec. 31 After the revenue and expenses were closed into the Income Summary account, that account indicated a net income of $147,200. Instructions a. Prepare journal entries in general journal form to record the above transactions. Include entries at December 31 to close the Income Summary account and the Dividends account b. Prepare the stockholders' equity section of the Sharnes Communications, Inc., balance sheet at December 31. LO11-4, LO1I-5 RORLEM 11.5A The year-end balance sheet of Ft Smith Products includes the following stockholders' equity section (with certain details omitted)