P13.4A (LO 1, 2, 3) Peck Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders equity balances.

Preferred Stock (10,000 shares) $500,000

Paid-in Capital in Excess of ParPreferred Stock 75,000

Common Stock (70,000 shares) 350,000

Paid-in Capital in Excess of ParCommon Stock 700,000

Retained Earnings 300,000

During 2020, the following transactions occurred.

Feb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $120,000.

Mar. 1 Issued 1,000 shares of preferred stock for cash at $65 per share.

July 1 Issued 16,000 shares of common stock for cash at $7 per share.

Sept. 1 Issued 400 shares of preferred stock for a patent. The asking price of the patent was $30,000.

Market price for the preferred stock was $70 and the fair value for the patent was indeterminable.

Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share.

Dec. 31 Net income for the year was $260,000.

Instructions

a. Journalize the transactions and the closing entry for net income.

b. Enter the beginning balances in the accounts, (done for you) and post the above journal entries to the stockholders equity accounts. (Use the T-accounts that have been set up for you on the excel spreadsheet.)

c. Prepare a stockholders equity section at December 31, 2020, using the template. Titles have been recorded for you. You must add in the missing information. The correct total for stockholders' equity is $2,570,000.