The owners are desirous of company serving financial trans tractions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed in January 1, 2020 and the Mulatto Companys charter will authorize 1,000,000 shares of common stock and 400,000, $ 100 par value, 5% cumulative preferred stock. They have asked you an accounting student to prepare the companys journal entries and statement of owners equity based on the following information.

1. Issued 15000 shares of common stock. Stock has par value 0 .10 per share and was issued at $30 per share.
2. Issue 5000 shares of preferred stock at par value as payment in exchange for legal services.
3. Exchange 120000 shares of common stock for land with and appraise value of $500000.
4. Eared net income $ 600000
5. Paid dividend to preferred shareholders as well as $ 2 per share to common stockholders.

Using the above information:

A. Prepare the journal entries with narrations to record the following:

The issuance of stock

Close out net income to retained earnings

Dividend paid

Close out dividend to retained earnings

B. Prepare Mulatto Companys stockholders equity section of the balance sheet at December 31, 2020. The following information must be clearly stated/shown:

Information on par value

The number of shares authorized and issued where necessary.

The sub total for the total paid in capital

Retained earnings

Total stockholders equity.