The opening balances in the shareholders' equity section of Goldman Investments Ltd. is shown below. Goldman is based in Toronto and follows IFRS for reporting purposes.

Common shares, 1,320,700 shares authorized; 352,900 shares issued and outstanding 3,975,300

Retained earnings 527,650

During the current year, the following transactions occurred:

1. The company issued 100,000 rights to the shareholders. Fifteen rights are needed to buy one share at $37 and the rights are void after 30 days. The shares' market price at this time was $32 per share.

2. The company sold the public a $200,000, 10% bond issue at par. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common shares at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8.

3. All but 10,000 of the rights issued in Item 1 were exercised in 30 days.

4. At the end of the year, 80% of the warrants in Item 2 had been exercised, and the remaining were outstanding and in good standing.

5. During the current year, the company granted stock options for 10,000 common shares to company executives. The company, using an options pricing model, determined that each option is worth $15. The exercise or strike price is $35. The options were to expire at year end and were considered compensation for the current year.

6. All but 2,500 shares related to the stock option plan were exercised by year end. The remainder expired because one of the executives failed to fulfill an obligation related to the employment contract.

REQUIRED:

A. Prepare all required journal entries for the current year to record each of the transactions noted above. If no entry is required, provide a brief (1-2 sentence) explanation as to why. Be sure to show all supporting calculations!

B. Prepare the Shareholders' Equity section of Goldman Investments Ltd.'s Statement of Financial Position at year-end. Retained earnings at year-end is $679,400.