The post-closing trial balance of Cullumber Corporation at December 31, 2021, contains the following shareholders' equity accounts: $5 noncumulative preferred shares (9,300 issued) Common shares (396,900 issued) Retained earnings $976,500 1,979,600 3,150,850 A review of the accounting records reveals the following: 1. 2. 3. 4. 5. The January 1, 2021, balance in Preferred Shares was $976,500, Common Shares was $1,278,000 (319,500 shares), the balance in Contributed Surplus-Reacquisition of Common Shares was $30,900, and the balance in Retained Earnings was $2,443,000. One of the company's shareholders needed cash for a personal expenditure. On January 15, the company agreed to reacquire 20,600 shares from this shareholder for $7 per share. On July 1, the company corrected a prior period error that resulted in an increase to the Long-Term Investment account, as well as to the prior year's profit of $253,000 before income tax. On October 1, 98,000 common shares were sold for $8 per share. The preferred shareholders' dividend was declared and paid in 2021 for two quarters. Due to a cash shortage, the last two quarters' dividends were not declared or paid. 6. Profit for the year before income tax was $763,000. The company has a 25% income tax rate. Prepare entries to close dividends and the Income Summary account and post. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Dec. 31 Dec. 31 (To close Income Summary.) (To close dividends to retained earnings.) Debit Credit Retained Earnings Date Explanation Ref. Debit Jan. 1 Balance Jan. 15 Reacquisition of shares J1 July 1 Prior period error J1 Dec. 31 Income Summary J1 Dec. 31 Dividends J1 Credit Balance 2,443,000 30,900 2,412,100 189,750 2,601,850