Selected transactions completed by Equinox Products Inc.during the fiscal year ended December 31, Year 1, were asfollows: a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receivingcash. c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payablesemiannually. d. Declared a quarterly dividend of $0.50 per share on common stock and$1.00 per share on preferred stock. On the date of record, 100,000shares of common stock were outstanding, no treasury shares wereheld and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at $40 per share plus a $150brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at $33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from thefounders for $24 per share. Pinkberry has 125,000 shares issued andoutstanding. Equinox Products Inc. treated the investment as an equitymethod investment. i. Declared a $1.00 quarterly cash dividend per share on preferred stock.On the date of record, 20,000 shares of preferred stock had beenissued. j. Paid the cash dividends to the preferred stockholders. k. Received $27,500 dividend from Pinkberry Co. investment in (h). l. Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from theissuing company, at their face amount plus accrued interest of $375.The bonds are classified as a held-to-maturity long-term investment. m. Sold, at $38 per share, 2,600 shares of treasury common stockpurchased in (g). n. Received a dividend of $0.60 per share from the Solstice Corp.investment in (f). o. Sold 1,000 shares of Solstice Corp. at $45, including commission. p. Recorded the payment of semiannual interest on the bonds issued in (c)and the amortization of the premium for six months. The amortization isdetermined using the straight-line method. q. Accrued interest for three months on the Dream Inc. bonds purchasedin (l). r. Pinkberry Co. recorded total earnings of $240,000. Equinox Productsrecorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was $39.02 per share onDecember 31, Year 1. The investment is adjusted to fair value, using avaluation allowance account. Assume that Valuation Allowance forAvailable-for-Sale Investments had a beginning balance of zero.

Instructions 1. Journalize the selected transactions. 2. After all of the transactions for the year ended December 31, Year 1, had beenposted [including the transactions recorded in part (1) and all adjustingentries], the data that follows were taken from the records of EquinoxProducts Inc. a. Prepare a multiple-step income statement for the year ended December31, Year 1, concluding with earnings per share. In computing earningsper share, assume that the average number of common sharesoutstanding was 100,00