The stockholders equity accounts of Karp Company at January 1, 2017, are as follows.

Preferred Stock, 6%, $50 par $640,000

Common Stock, $6 par 975,000

Paid-in Capital in Excess of ParPreferred Stock 212,000

Paid-in Capital in Excess of ParCommon Stock 290,000

Retained Earnings 799,000

There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events.

July 1 Declared a $0.80 cash dividend per share on common stock.

Aug. 1 Discovered $24,000 understatement of depreciation expense in 2016. (Ignore income taxes.)

Sept. 1 Paid the cash dividend declared on July 1.

Dec. 1 Declared a 15% stock dividend on common stock when the market price of the stock was $17 per share.

Dec. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2018.

Dec. 31 Determined that net income for the year was $377,000.

Dec. 31 Recognized a $220,000 restriction of retained earnings for plant expansion.

Journalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)