Shareholders' Equity- Rich Co On January 1, 2020, Rich Co. showed the following shareholders' equity hares, 50,000 s 500,000 Preferred shares, 5%, cumulative preferred shares, shares authorized, 5,000 shares issued and outstanding Common shares, unlimited number authorized, 30,000 300,000 50,000 shares issued and outstanding Common stock dividend distributable Retained earnings $1,000.000 1 Reacquired 2,000 common shares for $8 per share Feb. 1 The common stock was split 2 for 1. Mar. 4 Subscriptions for 5,000 common shares were accow share. One-quarter of the price was received as a down-payment. was Issued Mar. 30 were 30 the common stock dividends declared last year. Note that 4,000 shares were issued as a dividend. April4 Received the balance o the subscriptions from March 4, Howe su 4. However one lo loses for 500 defaults. According to the terms of the subscription the the down-payment Issued a $1,000,000 bond for a price of 105. Each $1,000 has 4 detachable warrants that can be used to buy common shares. Each warrant allows the holder to buy a common share for $15. The market value of the bond without warrants is 101 but the market value of the warrants is unknown. May 11 Issued a $500,000 convertible bond for a price of 107. Each $1,000 bond can be converted into 80 common shares. Had the bonds not been convertible, the issue price would have been 103. June 4 Oct. 4 50% of the warrants from May 1 I were exercised. Oct. 22 Issued I right for each common share outstanding It takes 5 rights to buy a common share for $15. The convertible bond issued on June 4 was converted into shares. Ignore any amortization of the premium. Three-quarters of the rights issued on Oct. 22 were exchanged for common shares. Each common share is worth $18 today Oct. 31 Nov. 11 Declared the annual dividend on preferred shares and an additional 50 cents common share. Dec. 20 per Dec. 31The net income was $275,000 for the year