Southern Exposure Ltd. begins operations on January 2, 2016. During the year, the following transactions affect shareholders equity:

1.		Southern Exposures articles of incorporation authorizes the issuance of 962,800 common shares, and the issuance of 97,700 preferred shares, which pay an annual dividend of $1.80 per share.
2.		A total of 251,840 common shares are issued for $4 a share.
3.		A total of 14,260 preferred shares are issued for $13 per share.
4.		The full annual dividend on the preferred shares is declared.
5.		The dividend on the preferred shares is paid.
6.		A dividend of $0.10 per share is declared on the common shares but is not yet paid.
7.		The company has net income of $164,200 for the year. (Assume sales of $727,200 and total operating expenses of $563,000.)
8.		The dividends on the common shares are paid.
9.		The closing entry for the dividends declared accounts is prepared.

No. Account and explanation Debit Credit 3. 7 (To close revenue account.) (To close expense account.) (To close net income.)