P11-2 Recording Transactions Affecting Shareholders' Equity LO11-3, 11-7, 11-8 King Corporation began operations in January, year 1. The charter authorized the following share capital: Preferred shares: 6 percent, $30 par value, authorized 50,000 shares. Common shares: no par value, authorized 180,500 shares. During year 1 , the following transactions occurred in the order given: a. Sold and issued 25,000 common shares to each of the three organizers. Collected $11 cash per share from two of the organizers and received a plot of land with a small building on it in full payment for the shares of the third organizer and issued the shares immediately. Assume that 30 percent of the non-cash payment received applies to the building. b. Sold and issued 7,000 preferred shares at $30 per share. Collected the cash and issued the shares immediately. c. Sold and issued 3,000 preferred shares at $30 and 3,000 common shares at $14 per share. Collected the cash and issued the shares immediately. d. The operating results at the end of year 11 were as follows: Required: 1. Prepare the journal entries to record each of these transactions and to close the accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet 34 Record sale and issue of 75,000 common shares at $11 per share. Note: Enter debits before credits. Journal entry worksheet Record sale and issue of 3,000 preferred shares at $30 per share and 3,000 common shares at $14 per share. Note: Enter debits before credits. Journal entry worksheet Record closing entry to transfer revenues and expenses to income summary. Note: Enter debits before credits. Journal entry worksheet (1) Record closing entry to transfer the profit to Retained earnings. Note: Enter debits before credits. 3. Prepare the shareholders' equity section of the statement of financial position for King Corporation at the end of year 1. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ KING CORPORATION } \\ \multicolumn{1}{|c|}{ Shareholders' Equity } \\ \hline \multicolumn{1}{|c|}{ As at End of Year 1} \\ \hline Share capital: \\ \hline Preferred shares \\ \hline Common shares \\ \hline Retained earnings & \\ \hline Total shareholders' equity & \\ \hline \end{tabular}