P11-4A. Stockholders Equity: Transactions and Balances Sheet Presentation The Stockholders' equity of Peak Corporation at January 1 follows:

7 percent preferred stock, $100 par value, 20,000 shares authorized;

5,000 shares issued and outstanding...$500,000

Common Stock, $15 par value, 100,000 shares authorized;

40,000 shares issued and outstanding......600,000

Paid-in capital in excess of par value-Preferred stock.......24,000

Paid-in capital in excess of par value-Common Stock......360,000

Retained earnings............................325,000

Total Stockholders' equity..............$,809,000

The Following Transactions, among others, occurred during the year:

Jan. 12 Announced a 4-for-1 common stock split, reducing the par value of the common stock to $3.75 per share. The authorization was increased to 400,000 shares.

Mar. 31 Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock.

June 1 Acquired equipment with a fair market value of $90,000 in exchange for 500 shares of preferred stock.

Sept. 1 Acquired 10,000 shares of common stock for cash at $10 per share.

Oct. 12 Sold 1,500 treasury shares at $12 per share.

Nov. 21 Issued 5,000 shares of common stock at $11 cash per share.

Dec. 28 Sold 1,200 treasury shares at $9 per share.

31 Closed net income of $105,000 to the Retained Earnings Account.

Required

a. Set up T-accounts for the Stockholders' equity accounts as of the beginning of the year and enter the January 1 balances.

b. Prepare Journal entries for the given transactions and post them to the T-accounts (set up any additional T-accounts needed). Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the retained earnings T-account. Determine the ending balances for the stockholder's equity accounts.

c. Prepare the stockholders' equity sections of the balance sheet at December 31.